The best Silicon Valley cyber security company right now is Palo Alto Networks (PANW).
It’s not really debatable at this point.
It’s not surprising to find out that it is also the largest artificial intelligence (AI)-based cybersecurity company.
AI is all the rage now with grand promises of huge profits in the future.
To get into the nitty-gritty of it – PANW operates across three core segments.
These divisions are cloud security, network security, and security operations and the task in hand right now is working to integrate AI-powered capabilities across them all.
When it comes to network security, PANW is the gold standard in multiple categories. Its VM firewall, designed to add an extra layer of protection to private and public clouds, is ranked No. 1 in the industry for market share.
Since the company is one of the largest providers of cybersecurity in the world, it collects a treasure trove of data, which means it's well-positioned to train AI models to help protect its customers.
It analyzes 750 million new data points per day, leading its AI and machine learning models to detect 1.5 million unique, never-before-seen attacks daily. The end result: Palo Alto's AI blocks 8.6 billion attacks on behalf of customers every 24 hours.
Some of the largest organizations in the world trust Palo Alto as their primary cybersecurity provider. In the last quarter, they took bookings from customers spending a minimum of $10 million annually soaring by 136% year over year.
Bookings from customers spending at least $1 million and at least $5 million grew by 29% and 62%, respectively. Overall, these numbers highlight the surge in demand for advanced cybersecurity tools even during this difficult economic period.
Market research firm IDC estimates that global cybersecurity spending could increase 12% in 2023 to $219 billion as compared to last year. IDC also expects that global cybersecurity spending could cross $300 billion by 2026.
So, Palo Alto is growing faster than its competition and once they harness the power of AI, the stock could take off like a scalded chimp.
According to market research firm BlueWeave Consulting, the application of AI in cybersecurity is expected to grow at an annual pace of 21% through 2029 and generate $79 billion in annual revenue. That would be 3.5 times the size of the AI-enabled cybersecurity market last year.
Tech really can’t do much wrong these days.
It’s a terrible time for unproven companies and the share price proves that of stocks such as Coinbase Global (COIN) or Robinhood (HOOD).
However, established firms like PANW are lapping it up
The stock hit a rough patch and sunk to $135 per share and is now accelerating to $230 per share.
For a tech stock that aggressively raised profitability estimates and has turned the corner from going from loss maker, every 3-5% dip is a great buying opportunity for this stock.
The tech sector is up 9% in the past 30 days and that type of overperformance is due to accelerating business models like PANW.
