The company's shares have roughly doubled over the past three months, as investors have warmed to the idea that AI is increasing the need for cybersecurity products

A Capital One analyst just turned bullish on Palo Alto Networks shares.

For months, cybersecurity bulls have offered that a growing number of artificial intelligence-driven attacks from hackers and bad actors in the Middle East would be good for business. Now that narrative seems to be catching on in a more widespread way.

Just look at International Business Machines $(IBM)$, whose CEO Arvind Krishna told shareholders on Tuesday that customers have been "distracted" due to "rapidly evolving, industry-wide cybersecurity concerns."

That commentary broadly offered a lift to cybersecurity stocks, Citizens analyst Rustam Kanga told MarketWatch.

The sector has won over investors recently, as evidenced by big moves in shares of major companies like Palo Alto Networks (PANW) and CrowdStrike (CRWD) over the last few months. They've both roughly doubled over a three-month span.

And Capital One analyst Connor Murphy is newly upbeat about the potential for shares of Palo Alto Networks to sustain momentum. He lifted his rating on the stock to overweight from equal weight and raised his price target to $421 from $307 on Thursday, saying that the company will benefit from data center buildouts and budget shifts toward cybersecurity.

He also upgraded Okta's $(OKTA)$ stock to overweight from equal weight and raised his price target to $171 from $126, praising the company's partnerships with other cybersecurity players. He expects a "solid beat" from the company when it reports earnings in August.

As for Palo Alto Networks, Murphy likes the company's position as a "consolidator" in the cybersecurity space given its emphasis on "platformization" - a strategy that refers to integrating a number of security products into one platform.

Further, he said that the federal government's focus on bolstering its cybersecurity posture should benefit the company.

Meanwhile, an existing Palo Alto Networks bull recently got even more bullish. On Wednesday, Tigress Financial Partners analyst Ivan Feinseth reiterated his buy rating on Palo Alto Networks shares and increased his 12-month price target to $430 from $245.

He explained that Palo Alto Networks' next-generation security platform is an "AI-driven, unified platform that brings together network, cloud, security operations, and identity/trust... into a single prevention-focused architecture..." That replaces "siloed, reactive tools with integrated, automated protection," he told MarketWatch.

Feinseth also noted that the company's acquisition of the Israeli identity security platform CyberArk in February makes identity security a "core pillar" of its software stack.

Moreover, escalating cyber threats from Russia, China and the Middle East are driving demand for the services of cybersecurity companies.

On Tuesday, the Cybersecurity and Infrastructure Security Agency released a joint report with the NSA, FBI among other agencies warning of Russian cyber threat activity.

See also: A slower AI payoff risks tipping the economy into recession, Apollo says

-Hannah Pedone

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July 16, 2026 13:43 ET (17:43 GMT)

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