Palo Alto Networks (PANW) stock rose 14% over the past week while the S&P 500 was roughly flat, as AI helped uncover software flaws and an Evercore survey showed security budgets firming. The broader cybersecurity group rallied too, with CrowdStrike (CRWD) up 11%. The author argues the valuation is already full: the forward P/E reached 96x on Oct. 27 versus a five-year average of 57x, and the stock closed Oct. 28 just under the $399 average analyst target. The main risk cited is that major AI players, such as Amazon with AWS Continuum, may sell defensive tools themselves. The author says the fiscal first-quarter report, which will test next-generation security ARR, is the key event, and rates the stock as a hold for now.
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