Palo Alto Networks this month became the first cybersecurity company to eclipse $100 billion in market value. We believe it can get plenty bigger. On Dec. 14, it traded above market cap milestone for the first time when shares hit an all-time intraday high of $318 each. The stock has yet to close above that level. Hitting the $100 billion mark was a long-held goal CEO Nikesh Arora, but should be viewed as a new beginning, not an end. Shares could move higher in 2024 even if the operating environment proves more challenging. Palo Alto is the “winner and new champion of cybersecurity,” Jim Cramer said recently. PANW YTD mountain Palo Alto Networks (PANW) year-to-date performance While PANW shares have cooled off a bit recently, the company’s leadership in the industry, coupled with strong demand and a robust customer base, will serve it well in the new year. First, we like investing in cybersecurity, a secular theme expected to grow in the coming years, regardless of the economic backdrop. And Palo Alto has shown it can perform during uncertain times — with interest rates at 22-year highs — and will continue to do so as the Federal Reserve looks to cut rates in 2024. Cybersecurity threats to companies are only going in one direction: up. “This year has been a phenomenal year for cybersecurity stocks,” Arora told Jim in a recent interview , arguing that more companies will rely on the kinds of services Palo Alto provides. “And I think it’s just the beginning.” Shares of Palo Alto have more than doubled in price throughout 2023, up a whopping 116%. Despite the corporate needs for cybersecurity, we are aware that spending could get cut if we tip into a recession next year. On top of that, the high cost of money and customers seeking shorter-term duration contracts are potential headwinds. This was one reason for the billings pressure last quarter , which hit the stock price. We said to look past it and to buy off the weakness, focusing instead on the low churn…
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