PANW Bets on Prisma AIRS: Is it the Key to Future Platform Growth?

Palo Alto Networks (PANW) is expanding its platform through the addition of its latest AI runtime security, Prisma AIRS. The new product is designed to protect AI applications, models, and data, an area where enterprises face rising risks as they adopt AI tools like copilots and plugins.

As enterprises race to adopt generative AI, the company sees new attack surfaces forming, both in how organizations build AI and in how employees use third-party AI tools. Prisma AIRS is meant to close those gaps, providing visibility, data loss prevention, and compliance safeguards.

The new product supports Palo Alto Networks’ broader push into AI security. In the fourth quarter of fiscal 2025, the company reported AI-related Annual Recurring revenues (ARR) of $545 million, which is 2.5 times higher than the year-ago quarter. Moreover, growth in the upcoming quarters is expected to be driven by both Prisma AIRS and the Protect AI acquisition, which was completed in the fourth quarter.

Additionally, AI is creating new attack surfaces. Threats can now come from AI-driven malware or from copilots directly accessing sensitive data. Prisma AIRS is positioned as part of Palo Alto Networks’ integrated platform, alongside Prisma Cloud, SASE, and Cortex, to give enterprises a single security approach.

Just weeks after launch, Prisma AIRS has already built an eight-figure sales pipeline. As enterprises spend more on AI, Prisma AIRS could become a foundational element of Palo Alto Networks’ platform strategy. This is expected to help the company move closer to its long-term goal of $15 billion in ARR by fiscal 2030. The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 total revenues is pegged at $10.43 billion, indicating a year-over-year increase of 13.1%.

How Competitors Fare Against PANW

Competitors like CrowdStrike (CRWD) and Zscaler (ZS) are also gaining ground through platform expansion and AI innovation.

CrowdStrike ended its second quarter of fiscal 2026 with $4.66 billion in ARR, reflecting 20% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.

Zscaler ended its third quarter of fiscal 2025 with $2.9 billion in ARR, reflecting 23% year-over-year growth. The robust growth was driven by Z-Flex and rapid traction across Zscaler’s three strategic growth pillars, which include Zero Trust Everywhere, Data Security Everywhere and Agentic Operations.

PANW’s Price Performance, Valuation and Estimates

Shares of Palo Alto Networks have gained 11.2% year to date compared with the Zacks Security industry’s growth of 18.8%.

PANW YTD Price Return Performance

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 12.71X, slightly lower than the industry’s average of 13.06X.

PANW Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 13.2% and 13.4%, respectively. The estimates for fiscal 2026 have been revised upward over the past 30 days, while the estimates for 2027 earnings have been revised upward over the past 60 days.

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research