Is Palo Alto Networks Stock a Buy Now?

Key Points

• Since the war in Iran began in late February, Palo Alto Networks’ stock has risen some 17%.

• The rise is likely fueled by what investors see as an increased need for cybersecurity.

• Is Palo Alto Networks still a buy after this surge in price?

With geopolitical tensions rising and war in Iran, cybersecurity has become more important in recent months for governments, companies, and organizations. That may be why there has been a surge of interest among investors in cybersecurity stocks.

Palo Alto Networks (NASDAQ: PANW) is one of the leading enterprise cybersecurity firms, focusing on providing cybersecurity for large companies and governments across their entire enterprises.

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Since Feb. 24, just before the conflict in Iran started, it is no coincidence that Palo Alto Networks stock has surged some 17% over a period when the overall market has sputtered. That’s because this war is heightening the potential for cyberattacks, spurring companies and organizations to protect themselves.

Is this a good time for investors to buy Palo Alto Networks stock?

Image source: Getty Images.

Increase in cyberattacks due to war

The war in Iran has led to an increase in cyberattacks, according to Palo Alto Networks’ Unit 42, its elite cybersecurity team.

And earlier this month, President Donald Trump signed an executive order that focuses on improving cybersecurity and combatting cybercrime. The order calls for more scrutiny of organizations’ and companies’ cybersecurity efforts and could ultimately create the need for better systems and more spending on cybersecurity.

These factors should help fuel Palo Alto Networks’ already robust growth. In its latest fiscal quarter (ended Jan. 31, 2026), it grew revenue 15% year over year with annual recurring revenue (ARR) rising 33%. Further, adjusted earnings per share rose 27%.

For the current quarter, the company projects ARR to grow 56% year over year and revenue to surge by 28% to 29%. In addition, it calls for remaining performance obligations, or contracts in the pipeline, to surge 23%. Projected growth rates for the full fiscal year are similarly strong.

This outlook was posted on Feb. 17, so it was before the conflict in Iran and the Trump executive order. It will be very interesting to see if those projections move higher when the company reports its fiscal third-quarter earnings on May 19.

Is Palo Alto Networks stock a buy?

Palo Alto Networks is the largest pure-play cybersecurity firm in the world and has been around the longest. It is widely considered the most trusted name in cyberdefense.

It already had a robust pipeline and strong growth prospects leading up to the conflict in Iran. I think the growth rates could go even higher, given the current environment and the federal focus on cybersecurity, combined with Palo Alto’s status and reputation.

The one concern is its valuation, which has come down but is still very high. The stock is trading at 93 times earnings and 45 times forward earnings. That is worth watching, particularly after this recent surge. While the stock is a great long-term buy, I’m not entirely sure it’s a great buy right now after a 17% jump in share price. It might be wise to wait for a better entry point.

Should you buy stock in Palo Alto Networks right now?

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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.