Palo Alto Networks (PANW) Earnings In, Baird Stays Bullish With $230 Target

We recently published a list of 10 AI Stocks Investors Are Watching Today. In this article, we are going to take a look at where Palo Alto Networks, Inc. (NASDAQ:PANW) stands against other AI stocks that investors are watching today.

Speaking on CNBC’s “Halftime Report”, CEO of Ritholtz Wealth Management and CNBC PRO contributor Josh Brown said that he believes the most important theme for the stock market right now is artificial intelligence, not tariffs.

“The most important thing to come out of this past earnings report is that AI is more important than tariffs to the stock market.”

Brown cited JPMorgan research, noting that the term “AI” was mentioned 2.6 times more often than the word “tariff” in the last round of S & P 500 earnings reports.

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He even said that those Big Tech companies that affirmed or raised guidance have been saviors, protecting the stock market from the massive turmoil in April.

“This is an AI driven tape. This is still the most important theme in the entire market. Yes, there are other themes. Yes, there are other sectors doing well, but absent AI, there’s just no chance that we would have pulled this this spring out of the hole the way that we have, and that’s because of the affirmed guidance.”

That said, a report from Silicon Valley Bank has revealed how venture capital firms focused on artificial intelligence are behind much of the growth in the startup market. Meanwhile, companies in other areas are struggling to raise cash.

“Exclude AI investment and the story changes. There is no meaningful uptick for companies not leveraging AI, with investment from this group essentially flat for the last year.”

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

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: 64

Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity. The company announced its fiscal third quarter 2025 financial results on May 20, 2025. The AI-powered cybersecurity vendor reported a 15% year-over-year increase in revenue, reaching $2.3 billion and just beating the analyst estimate of $2.28 billion. The GAAP diluted earnings per share (EPS) were $0.37, exceeding the estimated EPS of $0.35.

According to CFO Dipak Golechha, Palo Alto’s Q2 results were driven by the success of its platformization strategy, a strategy that involves developing a central platform that integrates multiple products and services for a smooth customer experience. Providing guidance for the fiscal fourth quarter 2025, the company anticipates revenue between $2.49 billion and $2.51 billion, as well as a diluted non-GAAP net income per share in the range of $0.87 to $0.89.

On the same day, analyst Shrenik Kothari from Robert W. Baird maintained a “Buy” rating on the stock with a $230.00 price target. The rating update follows Palo Alto’s strong financial performance in fiscal third quarter 2025, demonstrating robust demand and a strong customer base.

Palo Alto delivered a solid increase in its Next-Generation Security Annual Recurring Revenue (NGS ARR), growing 34% year-over-year. Meanwhile, it’s Remaining Performance Obligations (RPO) increased by an estimated 19% year-over-year.

The company’s product revenue also demonstrated inspiring performance, surpassing consensus expectations by about 7 percentage points. Palo Alto also raised the lower end of its fiscal year 2025 revenue guidance, implying optimism in terms of a continued growth trajectory.

While it is true that a softer service line performance has led to a minor stock price decline, the positive developments highlighted have led the firm to maintain its optimistic outlook.

Overall, PANW ranks 7th on our list of AI stocks that investors are watching today. 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 have limited downside risk.  If you are looking for an AI stock that is more promising than PANW and that has 100x upside potential, check out our report about this cheapest AI stock.

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