Palo Alto Networks shares declined 2.9% on February 23-24, 2026, amid broader cybersecurity sector weakness. The primary driver was investor concern following Anthropic's announcement of Claude Code Security, a new AI tool designed to detect vulnerabilities in open-source software and offer patches. While other cybersecurity stocks experienced larger declines, PANW fell 3% as part of the sector selloff driven by fears about AI tools potentially impacting traditional cybersecurity solutions. Separately, Daiwa Securities lowered its price target on PANW to $175 from $212 while maintaining an Outperform rating. Additionally, BTIG reduced its price target to $200 from $248 before earnings. The company reported Q2 earnings with $2.59 billion in revenue and $432 million in net income. CEO Nikesh Arora noted customers were modernizing their software stack due to AI. PANW is also collaborating with Nvidia on AI-powered cybersecurity for industrial control systems.
Read full analysisPalo Alto Networks shares declined 2.9% on February 23-24, 2026, amid broader cybersecurity sector weakness. The primary driver was investor concern following Anthropic's announcement of Claude Code Security, a new AI tool designed to detect vulnerabilities in open-source software and offer patches. While other cybersecurity stocks experienced larger declines, PANW fell 3% as part of the sector selloff driven by fears about AI tools potentially impacting traditional cybersecurity solutions. Separately, Daiwa Securities lowered its price target on PANW to $175 from $212 while maintaining an Outperform rating. Additionally, BTIG reduced its price target to $200 from $248 before earnings. The company reported Q2 earnings with $2.59 billion in revenue and $432 million in net income. CEO Nikesh Arora noted customers were modernizing their software stack due to AI. PANW is also collaborating with Nvidia on AI-powered cybersecurity for industrial control systems.
Palo Alto Networks is the largest pure-play cybersecurity company, offering network security, cloud security, and AI-driven threat detection through a 'platformization' strategy that consolidates multiple security tools onto a single vendor. The company has been on an aggressive acquisition spree — closing the $25 billion CyberArk deal and $3.35 billion Chronosphere purchase while announcing a Koi acquisition — and near-term profit drag from integrating these deals has weighed heavily on shares since the Feb. 18 earnings report. Today's decline reflects the compounding effect of that post-earnings overhang with a fresh sector-wide AI disruption scare from Anthropic's Claude Code Security launch.