Palo Alto Networks Q2 Earnings Exceed Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 17 2026
0mins
Should l Buy PANW?
Source: seekingalpha
- Strong Earnings: Palo Alto Networks reported Q2 non-GAAP EPS of $1.03, beating expectations by $0.09, with revenue of $2.59 billion reflecting a 14.6% year-over-year increase, surpassing market forecasts by $10 million, indicating robust performance in the cybersecurity sector.
- Sustained Growth: The Next-Generation Security ARR grew 33% year-over-year to $6.3 billion, demonstrating the company's increasing competitiveness in a high-growth market, which is expected to continue driving revenue growth in the future.
- Optimistic Outlook: For Q3 FY2026, Next-Generation Security ARR is projected to reach between $7.94 billion and $7.96 billion, representing a 56% year-over-year growth, while remaining performance obligations are expected to grow by 32% to 33%, reflecting strong market demand and customer confidence.
- Annual Projections: Total revenue for FY2026 is anticipated to be between $11.28 billion and $11.31 billion, indicating a year-over-year growth of 22% to 23%, although the expected EPS is slightly below market consensus, the overall financial health remains strong, reflecting the company's ongoing profitability and cash flow management.
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Analyst Views on PANW
Wall Street analysts forecast PANW stock price to rise
34 Analyst Rating
28 Buy
5 Hold
1 Sell
Strong Buy
Current: 167.015
Low
157.00
Averages
232.49
High
265.00
Current: 167.015
Low
157.00
Averages
232.49
High
265.00
About PANW
Palo Alto Networks, Inc. is a global artificial intelligence (AI) cybersecurity company, with a comprehensive portfolio of cybersecurity solutions and platforms across network, cloud, security operations, AI and Identity. Its network security platform includes Secure Access Service Edge (SASE), Next-Generation Firewalls, Cloud Delivered Security Services (CDSS), Prisma AIRS, and Strata Cloud Manager (SCM). It delivers security operations capabilities that unifies standalone Security Information and Event Management (SIEM) tools, endpoint security, security automation, cloud detection and response (CDR), as well as attack surface management (ASM) capabilities on its Cortex platform. It delivers comprehensive security across the cloud application development lifecycle through Cortex Cloud. Its Unit 42 brings together expertise across threat research, incident response, and security consulting to deliver intelligence-driven, response-ready outcomes that help customers reduce cyber risk.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities Emerge in Cybersecurity Stocks
- Market Reaction and Investment Opportunity: In 2026, AI is perceived as a disruptive force, leading to a significant drop in cybersecurity stock prices in February; however, investors can find opportunities at attractive valuations, particularly in companies like Palo Alto Networks and Okta.
- Palo Alto Networks' Market Leadership: As the largest cybersecurity company by market cap, Palo Alto Networks achieved a 15% revenue growth in Q2 2023, reaching $2.6 billion, demonstrating strong demand for its technology and competitive positioning in the market.
- Okta's Financial Health: Okta reported a 12% revenue increase in FY 2026, totaling $2.9 billion, and turned an operating loss of $74 million from the previous year into a profit of $149 million, showcasing its robust performance in the identity security space.
- Forward-Looking Quantum Security Technology: Palo Alto Networks introduced the industry's first quantum-safe cipher translation technology to address threats posed by quantum computers, further solidifying its position as a key security provider while opening new avenues for future sales growth.
See More
Cybersecurity Stocks Face Sell-Off Amid AI Disruption Fears
- Market Reaction: In early 2026, cybersecurity stocks faced a sell-off due to fears of AI-induced industry disruption, with companies like Palo Alto Networks and Okta seeing share price declines, despite maintaining year-over-year revenue growth, indicating a shaken market confidence in their future prospects.
- Revenue Growth: Palo Alto Networks reported a 15% year-over-year revenue increase to $2.6 billion in its fiscal Q2 2026, demonstrating strong demand for its technology; however, the stock price drop has made its valuation more attractive, potentially providing a buying opportunity for investors.
- Technological Innovation: The acquisition of CyberArk marks Palo Alto Networks' entry into the identity security space, with CyberArk posting a 43% year-over-year revenue increase in Q3, showcasing the company's adaptability in a rapidly evolving market and providing a new source of sales growth.
- Financial Health: Okta's revenue rose 12% year-over-year to $2.9 billion in fiscal 2026, with operating income of $149 million compared to a loss the previous year, and its strong financial position combined with a lowered valuation makes it a focal point for investors looking for solid cybersecurity investments.
See More
Investment Opportunities in Cybersecurity Stocks
- Market Reaction Analysis: Since the launch of ChatGPT in 2022, AI has significantly impacted tech stocks, but by 2026, it is viewed as a disruptive force, leading to a sharp decline in cybersecurity stocks in February, presenting investors with an opportunity to capitalize on undervalued assets.
- Palo Alto Networks Performance: As the largest cybersecurity company by market cap, Palo Alto Networks achieved a 15% year-over-year growth in Q2 of fiscal 2026, with revenue reaching $2.6 billion, indicating strong demand for its technology and high customer loyalty.
- Okta's Financial Health: Okta reported a 12% revenue increase to $2.9 billion in fiscal 2026, with operating income of $149 million, showcasing its robust performance in the identity security space, alongside a strong balance sheet with $2.6 billion in cash and short-term investments.
- Investment Timing: Despite the sell-off in cybersecurity stocks, both Palo Alto Networks and Okta have forward P/E ratios at low levels, suggesting that now is an opportune time to invest in these companies, especially as AI technologies become more prevalent.
See More
Palo Alto Networks Expands AI Security Ecosystem
- Ecosystem Expansion: Palo Alto Networks announced collaborations with Nokia, U Mobile, Aeris, and Celerway to protect high-performance AI factories' infrastructure by integrating AI-powered security services directly into 5G and IoT networks, enhancing overall security.
- Support for European Gigafactories: The partnership with Nokia merges AI data center infrastructure with industry-leading security platforms, enabling organizations to scale high-performance workloads while strictly adhering to data sovereignty requirements, ensuring the integrity of industrial digitization.
- Regional Partnerships Enhance Security: Palo Alto Networks extends its security perimeter by embedding security services into 5G infrastructure through an agreement with Malaysia's U Mobile and integrating with Aeris for unified visibility of global IoT fleets, thereby enhancing its security framework.
- Global Coverage: Palo Alto Networks provides cybersecurity solutions across the Americas, Europe, the Middle East, Africa, Asia Pacific, and Japan, and while its investment potential is acknowledged, other AI stocks are viewed as having greater promise for higher returns.
See More
Oil Price Surge Triggers Market Turmoil
- Market Performance Review: The S&P 500 fell 1.6% last week, marking its first three-week losing streak in nearly a year due to the spike in oil prices driven by the Iran war, highlighting the market's sensitivity to geopolitical risks.
- Oil Price Volatility Analysis: Brent and West Texas Intermediate crude oil surged over 11% and 8% respectively over the past five trading sessions, with Brent settling above $100 for the first time since 2022, reflecting heightened market concerns over supply disruptions.
- Investment Strategy Adjustment: During the market turmoil, Jim Cramer advised investors to remain on the sidelines to avoid completely exiting the stock market during uncertain times, which could lead to missing out on future rebounds, while also increasing Procter & Gamble shares on Wednesday, indicating confidence in consumer goods.
- Cybersecurity Investment Opportunity: CrowdStrike performed well in the portfolio with a 3% weekly gain, as the escalation of the Iran war raised the risk of cyberattacks, leading Jim Cramer to view the company as a high-quality stock worth investing in due to its leadership in cybersecurity.
See More
The Iran Conflict Might Disrupt AI Advancements: Here's What to Expect.
- Impact on Various Sectors: The ongoing war in Iran is expected to affect multiple sectors, including technology.
- Key Issues: Major concerns include the supply of raw materials, rising interest rates, and the potential for a cyberwar.
See More
Investment Opportunities Emerge in Cybersecurity Stocks
- Market Reaction and Investment Opportunity: In 2026, AI is perceived as a disruptive force, leading to a significant drop in cybersecurity stock prices in February; however, investors can find opportunities at attractive valuations, particularly in companies like Palo Alto Networks and Okta.
- Palo Alto Networks' Market Leadership: As the largest cybersecurity company by market cap, Palo Alto Networks achieved a 15% revenue growth in Q2 2023, reaching $2.6 billion, demonstrating strong demand for its technology and competitive positioning in the market.
- Okta's Financial Health: Okta reported a 12% revenue increase in FY 2026, totaling $2.9 billion, and turned an operating loss of $74 million from the previous year into a profit of $149 million, showcasing its robust performance in the identity security space.
- Forward-Looking Quantum Security Technology: Palo Alto Networks introduced the industry's first quantum-safe cipher translation technology to address threats posed by quantum computers, further solidifying its position as a key security provider while opening new avenues for future sales growth.
See More
Cybersecurity Stocks Face Sell-Off Amid AI Disruption Fears
- Market Reaction: In early 2026, cybersecurity stocks faced a sell-off due to fears of AI-induced industry disruption, with companies like Palo Alto Networks and Okta seeing share price declines, despite maintaining year-over-year revenue growth, indicating a shaken market confidence in their future prospects.
- Revenue Growth: Palo Alto Networks reported a 15% year-over-year revenue increase to $2.6 billion in its fiscal Q2 2026, demonstrating strong demand for its technology; however, the stock price drop has made its valuation more attractive, potentially providing a buying opportunity for investors.
- Technological Innovation: The acquisition of CyberArk marks Palo Alto Networks' entry into the identity security space, with CyberArk posting a 43% year-over-year revenue increase in Q3, showcasing the company's adaptability in a rapidly evolving market and providing a new source of sales growth.
- Financial Health: Okta's revenue rose 12% year-over-year to $2.9 billion in fiscal 2026, with operating income of $149 million compared to a loss the previous year, and its strong financial position combined with a lowered valuation makes it a focal point for investors looking for solid cybersecurity investments.
See More
Investment Opportunities in Cybersecurity Stocks
- Market Reaction Analysis: Since the launch of ChatGPT in 2022, AI has significantly impacted tech stocks, but by 2026, it is viewed as a disruptive force, leading to a sharp decline in cybersecurity stocks in February, presenting investors with an opportunity to capitalize on undervalued assets.
- Palo Alto Networks Performance: As the largest cybersecurity company by market cap, Palo Alto Networks achieved a 15% year-over-year growth in Q2 of fiscal 2026, with revenue reaching $2.6 billion, indicating strong demand for its technology and high customer loyalty.
- Okta's Financial Health: Okta reported a 12% revenue increase to $2.9 billion in fiscal 2026, with operating income of $149 million, showcasing its robust performance in the identity security space, alongside a strong balance sheet with $2.6 billion in cash and short-term investments.
- Investment Timing: Despite the sell-off in cybersecurity stocks, both Palo Alto Networks and Okta have forward P/E ratios at low levels, suggesting that now is an opportune time to invest in these companies, especially as AI technologies become more prevalent.
See More
Palo Alto Networks Expands AI Security Ecosystem
- Ecosystem Expansion: Palo Alto Networks announced collaborations with Nokia, U Mobile, Aeris, and Celerway to protect high-performance AI factories' infrastructure by integrating AI-powered security services directly into 5G and IoT networks, enhancing overall security.
- Support for European Gigafactories: The partnership with Nokia merges AI data center infrastructure with industry-leading security platforms, enabling organizations to scale high-performance workloads while strictly adhering to data sovereignty requirements, ensuring the integrity of industrial digitization.
- Regional Partnerships Enhance Security: Palo Alto Networks extends its security perimeter by embedding security services into 5G infrastructure through an agreement with Malaysia's U Mobile and integrating with Aeris for unified visibility of global IoT fleets, thereby enhancing its security framework.
- Global Coverage: Palo Alto Networks provides cybersecurity solutions across the Americas, Europe, the Middle East, Africa, Asia Pacific, and Japan, and while its investment potential is acknowledged, other AI stocks are viewed as having greater promise for higher returns.
See More
Oil Price Surge Triggers Market Turmoil
- Market Performance Review: The S&P 500 fell 1.6% last week, marking its first three-week losing streak in nearly a year due to the spike in oil prices driven by the Iran war, highlighting the market's sensitivity to geopolitical risks.
- Oil Price Volatility Analysis: Brent and West Texas Intermediate crude oil surged over 11% and 8% respectively over the past five trading sessions, with Brent settling above $100 for the first time since 2022, reflecting heightened market concerns over supply disruptions.
- Investment Strategy Adjustment: During the market turmoil, Jim Cramer advised investors to remain on the sidelines to avoid completely exiting the stock market during uncertain times, which could lead to missing out on future rebounds, while also increasing Procter & Gamble shares on Wednesday, indicating confidence in consumer goods.
- Cybersecurity Investment Opportunity: CrowdStrike performed well in the portfolio with a 3% weekly gain, as the escalation of the Iran war raised the risk of cyberattacks, leading Jim Cramer to view the company as a high-quality stock worth investing in due to its leadership in cybersecurity.
See More
The Iran Conflict Might Disrupt AI Advancements: Here's What to Expect.
- Impact on Various Sectors: The ongoing war in Iran is expected to affect multiple sectors, including technology.
- Key Issues: Major concerns include the supply of raw materials, rising interest rates, and the potential for a cyberwar.
See More
