Artificial intelligence (AI) proved to be a boon for tech stocks after ChatGPT launched in 2022. But in 2026, the situation has changed drastically.
Now AI is seen as a disruptive force, threatening to upend business models in industries such as cybersecurity. Stock prices in the sector plunged in February after artificial intelligence giant Anthropic introduced a new AI security tool.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Wall Street’s knee-jerk reaction creates an opportunity for the industrious investor to scoop up cybersecurity stocks at compelling valuations. Two to consider are Palo Alto Networks (NASDAQ: PANW) and Okta (NASDAQ: OKTA).
Palo Alto Networks is an attractive investment because it’s an industry leader and the largest cybersecurity company by market cap. Consequently, despite Wall Street’s sell-off, customers are unlikely to dump Palo Alto Networks in favor of unproven AI solutions.
Cybersecurity is critically important in today’s digital world. Rival CrowdStrike proved this in 2024 when it accidentally released a software glitch that caused global chaos, creating disruption for airlines, banks, and hospitals.
Moreover, Palo Alto Networks’ sales are healthy, indicating its technology is in demand. In the company’s fiscal second quarter (ended Jan. 31), revenue rose a healthy 15% year over year to $2.6 billion.
In addition, the company is constantly evolving its protections. For instance, it acquired CyberArk in February, marking its first foray into the identity security space. This serves as a potent new source of sales growth. In the third quarter, CyberArk posted $342.8 million in revenue, up a whopping 43% year over year.
Palo Alto Networks’ solutions include defenses against quantum computers, which are capable of hacking through most of today’s existing cybersecurity. According to the company, it introduced “the industry’s first cipher translation, which instantly upgrades any application to be quantum safe.” As quantum computers move past the early stages of development, they become increasingly more of a threat, making Palo Alto Networks a key security provider.
Yet its share price drop suggests it’s at an alluring valuation. This can be seen in its forward price-to-earnings ratio, which tells you how much investors are willing to pay for a dollar of earnings based on estimates for the next 12 months.
