Companies are spending billions to bring artificial intelligence into their businesses, especially with the artificial intelligence story still gaining momentum. As that happens, it’s creating an opportunity for Palo Alto Networks (NASDAQ: PANW), which is why BTIG analyst Gray Powell raised his price target on PANW to $425 from $404 and maintained his Buy rating.
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Powell believes Palo Altocould deliver pro forma revenue growth of at least 17% in fiscal 2027, compared with Wall Street’s estimate of 14.6%. He also expects next-generation security annual recurring revenue, or NGS ARR, to grow at least 26%, ahead of the 24.5% consensus.
For investors, the appeal is straightforward: Faster recurring growth could suggest customers are making larger, ongoing commitments to Palo Alto’s products. Powell’s forecasts remain estimates, but they outline where he sees room for positive surprises.
Wall Street is not waiting for this company to become famous.
Institutions already control 88% of its shares.
This business generates billions in operating income, controls a massive American energy footprint, and is now using Palantir’s AI technology to improve its operations.
Yet the market still values it at less than $8 billion.
Chronosphere Expands Palo Alto Networks’ AI Security Opportunity
One business attracting attention is Chronosphere, which Powell said has surpassed $500 million in annual recurring revenue.
Chronosphere operates in observability, a technical term with a practical purpose. It helps companies understand what is happening inside their applications and technology infrastructure. As businesses add cloud services and AI workloads, identifying the source of a slowdown or failure can become increasingly difficult. Think about an online business whose checkout suddenly stops working. Knowing there is a problem is only the beginning. Teams need to identify what caused it and where to focus their response.
Palo Alto completed its acquisition of Chronosphere in January 2026, adding capabilities that provide visibility into complex digital operations. That creates another potential reason for customers to do more business with the company.
Palo Alto Expands Its Identity Security Business
Another part of the story is CyberArk and the identity security platform Palo Alto introduced as Idira. Identity security focuses on who, or what, can access a company’s systems. That includes employees, software, and increasingly AI agents that can perform tasks with limited human involvement. Palo Alto says Idira extends privilege controls across human, machine, and AI identities. The goal is to manage access more precisely as businesses become more automated.
Prisma AIRS Strengthens Palo Alto’s AI Security Strategy
Palo Alto’s Prisma AIRS platform adds another piece to its growth strategy. The company is building broader protection around AI, with capabilities spanning areas such as identity, endpoint security, and observability. Its product portfolio brings together technologies intended to help customers secure AI systems as those systems become more capable and interconnected.
Going forward, investors should watch recurring revenue trends, adoption of newer products, and evidence that customers are buying across the portfolio. Acquisition spending and integration costs also matter, because faster growth does not automatically translate into stronger earnings. BTIG’s outlook offers a clear bullish argument.
PANW Stock Eyes $400 Resistance
PANW stock maintains a strong technical position despite falling 2.3% to $382.90 on Sept. 29. Shares are trading well above the 50-day moving average at $357.88, keeping the broader uptrend intact. The stock has also recovered from its September pullback and is again approaching the psychologically important $400 level.
Momentum is improving as well. The MACD remains above its signal line, while the positive histogram indicates that bullish momentum has returned. A sustained move above $400 could reinforce the recent uptrend and put the stock into new territory. On the downside, the 50-day moving average around $358 provides an important technical reference. A break below that level would weaken the bullish setup and could bring the September lows back into focus.
Palo Alto Networks Has Multiple AI Security Growth Drivers
As companies use more AI, they will also need to keep their systems and information safe. New AI tools can help businesses work faster, but they also create more things to protect.
Companies need to know who can access sensitive data, what their AI tools are doing, and when something goes wrong. That creates several opportunities for Palo Alto Networks. One, Chronosphere helps businesses monitor their technology. Two, Idira helps control access to important systems. And three, Prisma AIRS helps protect AI applications. Together, these products give Palo Alto more ways to meet customer needs as AI becomes a bigger part of everyday business.
The bullish case is easy to understand. Businesses want the benefits of AI, and protecting their operations is part of making that investment work. The company has several products that could help them do that. If the company continues to win business and expand customer relationships, it could have a meaningful opportunity for growth in the years ahead.
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