Palo Alto Networks stock hit a record high on February 18 — rising 4.1%, despite a mixed February 13 report in which the company beat expectations for the quarter while maintaining previous guidance, according to Dow Jones.
Last week a partnership between Check Point Software and Wiz — the fast-growing cloud security startup which last July turned down a $23 billion takeover offer from Google – could pose a challenge to Palo Alto’s cloud security growth.
Does this partnership represent a competitive threat or will Palo Alto’s stock — which has risen 15.2% in 2025 — keep rising?
While analysts see some upside for Palo Alto Networks stock, the outcome depends on how effectively the partners can get Wiz’s Cloud Native Application Protection platform up and running for Check Point’s more than 100,000 customers, according to a Check Point release.
Palo Alto Networks sees itself as a leader in cloud security and expects its new products to prevail over rivals. “We believe that Cortex Cloud, the next-generation of Prisma Cloud, is a highly differentiated product and will maintain and further extend Palo Alto Networks overall leadership in cloud security,” noted a February 18 email from Palo Alto Networks VP Marketing, Next-Generation Security Scott Simkin.
Moreover, Palo Alto Networks sees an opportunity in the flaws of the Check Point-Wiz partnership. “Unlike point products and vendors that rely on loose integrations and partnerships, Cortex Cloud enables security teams to see and act on the complete picture of their security landscape, from application code to cloud infrastructure to runtime environments,” added Simkin.
Palo Alto Networks Mixed Performance And Prospects
Investors tend to reward companies when they report results that exceed their expectations and raise their forecasts. On February 13, Palo Alto Networks beat expectations but failed to raise guidance.
The company beat revenue and earnings expectations for the latest quarter. Revenue rose 14% to $2.3 billion in the January 2025-ending quarter – $100 million more than analysts expected while adjusted earnings per share of 81 cents was three cents ahead of consensus, noted Dow Jones.
Palo Alto’s backlog — more specifically, the company’s remaining performance obligations — did not exceed expectations. While RPO rose 21% in the January quarter to $13 billion, the amount was a mere $40 million more than the FactSet consensus, Dow Jones reported. Moreover, the company forecast RPO of $13,55 billion for the April-ending quarter — matching the consensus.
Palo Alto’s platform — which includes various cybersecurity services — was critical to the company’s performance. “Platformization drove our Q2 results,” CFO Dipak Golechha said in a release.
Moreover, enterprises bought from Palo Alto to secure their investments in the cloud used for artificial intelligence. Customers were “adopting technology driven by the imperative of AI, including cloud investment and infrastructure modernization,” CEO Nikesh Arora said in a release.
Check Point And Wiz Partner To Deliver Cloud Security Services
Palo Alto sees itself as a leader in the $43.7 billion (2024 global revenues) cloud security market growing at a 17.3% annual rate through 2032, according to Fortune Business Insights. Through a partnership with Check Point Software, Wiz expects the companies to win customers from Palo Alto, noted CTech.
They believe customers will view their service – which aims to combine network and cloud security – as more comprehensive than Palo Alto’s cloud solution. That’s because Wiz will bring its so-called cloud-native application protection to Check Point’s network security customers, CTech reported.
Check Point sees the partnership as helping companies manage risk and increase collaboration efficiency. “This partnership between the parties was formalized in order to create a new security paradigm—combining Check Point’s cloud network security expertise with Wiz’s CNAPP leadership to deliver comprehensive protection across hybrid mesh environments,” Check Point CEO Nadav Zafrir told CTech.
Wiz envisions customers will enjoy greater visibility and more effective prioritization of risks. “Our partnership is aimed to ensure that companies can seamlessly protect their network and cloud environments with an integrated, industry-leading solution while continuing to democratize cloud security,” Wiz CEO Assaf Rappaport said.
Palo Alto is a formidable competitor – providing the “most comprehensive cloud security solution on the market,” CTech wrote.
Moreover, Palo Alto sees itself as enjoying an advantage over the Check Point-Wix partnership. “We believe you can’t have data and workflows across disparate cloud security products and make sense of it,” noted Simkin.
“No amount of integrations or partnerships can solve for this complexity. To protect their cloud investments and stay ahead of adversaries, customers are looking
for a unified platform that brings together multiple sources of data, automates workflows, and applies AI to deliver insights to reduce risk and prevent threats. Cortex Cloud is the only solution on the market capable of providing this,” the email added.
Palo Alto expects Cortex Cloud to enable customers to respond more quickly to threats and provide “stronger security outcomes at a lower total cost of ownership than any collection of point products,” Simkin noted.
By combining cloud security with security operations, Palo Alto expects Cortex Cloud to provide “a fully native, end-to-end security solution” that outcompetes rivals who rely “on fragmented integrations or partnerships,” concluded Simkin.
Where Will Palo Alto’s Stock Go Next?
Palo Alto’s stock price has slight upside. Based on 41 Wall Street analysts offering 12-month price targets, Palo Alto stock would need to rise a mere 3.6% to reach their average target of $215.79, noted TipRanks.
Analysts have mixed views:
- New products and platformization are driving growth. SASE and Prisma Cloud offerings and the focus on platformization – in which some services are given away for free anticipating customers will ultimately pay for a full suite of services – are contributing to faster growth in annual recurring revenues and more large-deal wins, noted CMB International Securities analyst Saiyi He, according to TipRanks.
- While new ARR growth could be difficult to achieve, AI could expand market opportunity. There are “lingering concerns about net new annual recurring revenue growth as next-generation security ARR decelerated,” William Blair analyst Jonathan Ho wrote in a report featured by Investor’s Business Daily. “While Palo Alto reiterated its confidence in converting large scale customers to platforms, we believe investors are concerned that incremental gains will be harder to achieve. We are optimistic that drivers such as artificial intelligence can expand the market opportunity significantly to help Palo Alto reach its targets,” Ho added.
The Check Point-Wiz partnership is indicative of a trend among enterprises to contract with fewer vendors. “The partnership addresses the growing frustration among enterprises that have to deal with myriad security tools that are individually managed and don’t talk to each other,” according to J. Gold Associates principal analyst Jack Gold.
“They want consolidation and at the very least information sharing amongst them in order to both reduce operations and costs as well as enhance security through higher visibility,” Gold told MSSP Alert.
“Major network and cloud security vendors like Palo Alto and Cisco are moving in this consolidated direction, so smaller companies are being forced into collaborations or do outright acquisitions. The days of uniquely focused on one aspect of security is fast fading,” Gold concluded.
If Palo Alto can exceed modest ARR growth targets, the stock could rise when it reports results for the current quarter.