Palo Alto Networks (NASDAQ:PANW) is a cybersecurity firm that uses artificial intelligence (AI) to protect businesses from online threats. As highlighted by Zacks Investment Research, the rise in AI-driven cyberattacks is increasing demand for advanced security platforms. Key competitors in this sector include companies like Fortinet (NASDAQ:FTNT), SentinelOne (NYSE:S), and Okta (NASDAQ:OKTA).
A core part of Palo Alto Networks' strategy is "platformization," which encourages customers to use multiple products on a single platform. This approach is proving successful, as the company added 110 new platformized customers in the third quarter of fiscal 2026. This brings its total number of platform customers to approximately 2,280.
The company's platform demonstrates strong customer loyalty with a 120% net retention rate. This means existing customers are spending more on its services over time. Looking forward, Palo Alto Networks aims to have over 4,000 platformized customers and achieve $20 billion in Next-Generation Security Annual Recurring Revenue (ARR) by 2030.
Strong financial results support this growth. In its third quarter of 2026, revenue climbed 31% year-over-year to $3 billion. A significant driver was the 60% jump in its next-generation security annual recurring revenue, which reached $8.13 billion. This metric tracks the predictable revenue the company receives from subscriptions.
Reflecting this positive performance, analyst firm Citigroup (NYSE:C) reiterated its Buy rating for Palo Alto Networks on July 13, 2026. The firm also raised its price target on the stock to $400 from a previous target of $340. At the time of the announcement, the stock price was $325.91 per share.
