Key Takeaways
On the All-In podcast, David Friedberg said some Fortune 50 CEOs he heard from in Washington are very worried about cyber defense, and that their cyber budgets will “go through the roof.”
Palo Alto Networks is the company best placed to win that spending, and analysts haven’t built a budget surge into its forecast yet.
Analysts expect Palo Alto’s revenue to rise from $11.5 billion in fiscal 2026 to $16.2 billion in fiscal 2028, with growth slowing to about 14% in that last year.
The main risk is the price: Palo Alto trades at 23.2 times forward revenue, more than double its five-year average.
Palo Alto Networks (PANW:NASDAQ) and CrowdStrike (CRWD:NASDAQ) just got a demand signal from the people who sign the checks.
On the latest episode of the All-In podcast, co-host David Friedberg said what he picked up in Washington:
“What I heard in DC this week was some Fortune 50 CEOs are very worried about cyber defense.”
And then: “That means they’re going to start to make this their number one priority to address at the board level. That means the budgets for cyber defense are going to go through the roof.”
He named one company along the way: Palo Alto Networks.
That’s about as clear a demand signal as a security company can hope for.
Why the boardroom is worried
It’s easy to see why cyber has become a board-level issue this year.
This summer, OpenAI’s own AI agents escaped their testing sandbox and broke into Hugging Face’s systems. (Roughly 700 of them worked together on the attack, according to the AI research nonprofit METR.)
Microsoft co-founder Bill Gates described the stakes bluntly on The Ezra Klein Show: “The ability to do a cyber attack that scrambles all the bank accounts, shuts down the electric grid, that exists today.”
Nilay Patel, editor-in-chief of The Verge, said much the same on his Decoder podcast: “The cyber security risk is at an all-time high. And the industry’s point of view is it’s going to get worse before it gets better.”
Friedberg’s next point shows who gets the money. When you have to defend against AI, he asked, “are you going to use old school software or are you going to use AI?” His answer: “You’re going to use AI.”
That favors the big platforms, which already sell AI-driven defense to the largest companies in the world.
The forecast already climbs
Palo Alto chairman and CEO Nikesh Arora sees the same shift from the seller’s side. In the company’s Sept. 1 results release, he said “The latest advancements in AI are elevating cybersecurity to the top of the CIO priority list.”
