Why SentinelOne Stock Is Skyrocketing Today

Key Points

• SentinelOne stock is soaring today following a recent report that the company is on track to be acquired by Palo Alto Networks.

• Palo Alto Networks has said there is no truth to the rumors that it plans to buy SentinelOne.

• SentinelOne stock could see elevated volatility in the near term in conjunction with buyout speculation and news.

• 10 stocks we like better than SentinelOne ›

SentinelOne (NYSE: S) stock is soaring Monday following reports that the company could be acquired by another player in the cybersecurity space. The company's share price was up 8.7% as of 3:15 p.m. ET. Meanwhile, the S&P 500 was up 0.3%, and the Nasdaq Composite was up 0.5%. The stock had been up as much as 18.8% earlier in trading.

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SentinelOne stock is soaring today following a report that the company could be acquired by Palo Alto Networks. The validity of the report remains unconfirmed, but investors are excited about the possibility for the smaller cybersecurity player to be acquired at a premium.

SentinelOne stock surges on buyout report

Israeli news outlet Calcalist recently reported that Palo Alto Networks was in the advanced stages of contract negotiations to acquire SentinelOne. While Palo Alto Networks has subsequently said that there is no truth to the report that it's on track to buy the cybersecurity specialist, that hasn't stopped SentinelOne from seeing big valuation gains in today's trading.

What's next for SentinelOne?

In light of Palo Alto Networks' denial of the buyout report, it's tough to get a read on what the near-term future for SentinelOne stock looks like. Denying buyouts is par for the course before the potential deals are actually closed. It's also possible that there's little or no truth to reports that SentinelOne is on track to be acquired by Palo Alto Networks in the near future.

SentinelOne doesn't necessarily need to be acquired by Palo Alto or another large player in the cybersecurity market in order to deliver strong performance for long-term investors. On the other hand, the recent rally for the stock makes it riskier to buy now if the buyout news proves to be largely unfounded.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SentinelOne. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.