Was Jim Cramer Right About Palo Alto Networks (PANW)?

We recently published a list of Jim Cramer Nailed These 12 Stock Predictions. In this article, we are going to take a look at where Palo Alto Networks, Inc. (NASDAQ:PANW) stands against other stocks that Jim Cramer discusses.

During a recent episode of Mad Money, which aired on Wednesday, the 7^th of May, Jim Cramer gave some advice on how experts pick their stocks:

“I want to pull back the curtain and show you how a professional looks for stocks to buy and knows what to sell. There’s no magic. There’s no hidden talent. Just a bunch of disciplines, disciplines that can help you try to make mad money if you master them.”

READ ALSO: 13 Stock Predictions That Jim Cramer Got Completely Wrong

Cramer reminded investors to do solid research and only buy stocks they truly believe in, even if that belief comes with skepticism, as long as they think the price will go up. But he warned that belief alone isn’t enough if a stock is falling; the drop must be unrelated to the company’s actual performance to be a buying opportunity. Here’s his advice:

“Be certain you’re dealing with a momentarily damaged stock and not a troubled company that’s going down, down, down. How can you tell the difference between a damaged company and a damaged stock? The fundamentals haven’t changed, the stock probably hasn’t fallen from grace. It’s pulled back for mechanical reasons, profit taking, or some panic in the market in general.”

He then added that hedge funds often cause irrational market swings by treating stocks like short-term trades, not long-term investments. But if a company’s fundamentals do start to break down, it no longer belongs in your portfolio.

Our Methodology

For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during Mad Money episodes that aired on the 7^th and 8^th of May 2o24. We then calculated their performance for the past 12 months, until May 7^th, 2025, market close. We have also included the hedge fund sentiment for the stocks, which we sourced from Insider Monkey’s Q4 2024 database of over 900 hedge funds. The stocks are listed in the order that Cramer mentioned them.

Please note that this article mentions Jim Cramer’s previous opinions and may not account for any changes to his opinions regarding the stocks that are mentioned. It is primarily an examination of how his previously provided opinions have panned out.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Palo Alto Networks, Inc. (NASDAQ:PANW)

Number of Hedge Fund Holders: 83

In an older episode, Cramer revisited Palo Alto Networks, Inc. (NASDAQ:PANW) following its sharp post-earnings selloff in February, where the stock dropped over $100 overnight. He explained that despite initial panic over guidance, his Charitable Trust continued buying on the dip. Here’s what he said:

“When Cramer fave Palo Alto Networks, PANW, reported in late February the stock plunged from 366 to 262 overnight. We freaked out about cautious guidance and some seemingly scary comments on the conference call. But what did we do? The charitable trust bought the whole way, and it’s now gradually started working back. It’s now at 305 and change. Because I’m a big believer in Palo Alto because the demand for cyber protection is endless, especially now that the hackers have access to AI and this company is the most comprehensive sweet of solutions out there.”

Cramer’s call to buy the dip proved right as the stock rose by 23.46% since then.

Palo Alto Networks, Inc. (NASDAQ:PANW) is a top cybersecurity company offering AI-driven threat detection, firewall solutions, and cloud security services for enterprises worldwide. Cramer believes there’s still upside for the sock. Here’s what he said in April:

“I happen to like Palo Alto Networks too because there’s just so much work to do in this space. It’s why we own both CrowdStrike and Palo Alto for the charitable trust and I never violate my diversification rules. These two stocks are too good!”

Overall, PANW ranks 3rd on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of PANW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PANW but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.