Cybersecurity is a clear secondary beneficiary of AI that has been lumped into the software selloff, and Palo Alto Networks is one of the safe bets. It trades at 9x NTM sales for about 23% growth, with a Rule of 40 score above 60 and its CEO buying shares, which is hard to ignore. CrowdStrike and Zscaler are the other safe bets. x.com 

CrowdStrike may distinguish itself from an expensive cybersecurity group by showing more breakneck growth at earnings next month. Fortinet's slowing product revenue exposed how much relentless execution investors had priced into the group's extreme multiples, pulling CrowdStrike down in sympathy. CrowdStrike remains in a higher tier than Fortinet, which itself ranks above SentinelOne. x.com  x.com 

CrowdStrike and Palo Alto Networks need 50%-plus growth to deliver even a 10% IRR over a realistic horizon, but almost no conceivable case gets them there. They feel as dumb as Zoom and Peloton in 2021. Even if revenue doubles over four to five years, Palo Alto would still trade at 10x revenue and CrowdStrike at 20x, leaving little prospect of a real IRR; Palo Alto is growing in the teens today. x.com  x.com  x.com 

Palo Alto Networks stands to gain because Mythos has changed how companies budget for security, from a nice-to-have to a probable buy-it-now rush to sign with category leaders. The CEO has been pitching its Next Gen Security product hard, with margin expansion hoped for. That demand may show up in its guidance at today's earnings. The market is rewarding category leaders doing even better, such as ServiceNow and Cloudflare. Options imply a 10.5% move, about 21% for the 2x PALU fund. x.com 

Palo Alto Networks looks set for a near-term move to $400-$410 after its CEO bought $10M of shares. The setup resembles Dell's, and cybersecurity looks attractive here. x.com 

Palo Alto Networks is a hodge-podge of acquired cloud products stacked on a legacy firewall business, yet trades above 20x forward revenue. Two years from now it will likely be cheaper than today. By comparison, Salesforce has four times the revenue base at two-thirds of Palo Alto's market cap and trades below 20x GAAP earnings. x.com  x.com 

CrowdStrike and Palo Alto Networks should be enormous winners as agentic AI makes cybersecurity every enterprise's top priority, even ahead of AI investment. Threats from rogue internal agents and adversaries mean firms will rush to upgrade security, move to best-of-breed vendors and sharply raise budgets. Expected acceleration at leaders like CrowdStrike over the next 2-6 quarters looks far too low. CrowdStrike is the most advanced; Palo Alto is also favored, though some easy money is made. … Show more

Palo Alto Networks has strong secular tailwinds as AI adoption drives platform market-share gains, so the winner should be left to run. Morgan Stanley named it a sector top pick, raised its target to $410 from $394 with an Overweight rating, and cited underestimated enterprise spending consolidation. The stock trades near 52-week highs. x.com 

Zscaler looks like the better cybersecurity buy for the next three years because its valuation has diverged sharply from CrowdStrike's. Zscaler trades at 5.7x next-twelve-month revenue with 17-18% expected annual growth, versus CrowdStrike at 31.1x revenue and 150x earnings with 21-22% growth, probably the biggest gap ever between them. A 25% CAGR over 3-5 years is hard to model for CrowdStrike at that price. Zscaler has been beaten up for good reasons. x.com  x.com 

Cybersecurity stocks are priced for near-perfect execution. Forward P/Es stand at 201x for Cloudflare, 163x for CrowdStrike, 77x for Palo Alto Networks, 44x for Fortinet, 39x for Okta and 32x for Zscaler. x.com