Palo Alto Networks (PANW) is likely to report "solid" fiscal Q3 results above analyst expectations amid "strong" cyber security deal activity across enterprises, Wedbush said Monday in a research note.

The cybersecurity company is scheduled to release fiscal Q3 results after the close on Tuesday.

Backed by the stronger deal flow in the last few months, the brokerage believes that the company is "generating solid momentum for cybersecurity customer deployments on its platform now front and center."

The company is also poised to benefit from an increased migration of workloads and data to the cloud as cyber security "is a clear 2nd/3rd derivative play on the [artificial intelligence revolution], the brokerage said.

Wedbush analysts said they believe Q3 expectations "remain beatable," as Palo Alto Networks "accelerates its platformization strategy into the next few years with more customers looking to consolidate vendors."

The brokerage expects the company's AI products to strengthen further due to the recent launch of its AI suite, including Access, security posture management and runtime.

Wedbush maintained an outperform rating on the stock with a $225 price target.

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