For the first time in years, Palo Alto Networks (PANW) CEO Nikesh Arora has purchased company stock on the open market.
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A regulatory filing with the U.S. Securities and Exchange Commission (SEC) showed that Arora has made his first purchase of PANW stock since November 2019. The CEO bought 68,085 shares of the company he runs at a cost of $10 million.
Disclosure of the CEO stock purchase has PANW stock up 6% on March 30. However, worries that artificial intelligence (AI) will disrupt cybersecurity companies has sent Palo Alto’s stock down 14% so far this year. Cybersecurity stocks have fallen in unison over the past few months as the software sector falls victim to fears that new AI tools will upend their business models.
AI Threats to Palo Alto Networks
Earlier this year, AI startup Anthropic revealed a new AI tool that’s capable of scanning code vulnerabilities, a leading function of cybersecurity software. That tool from Anthropic shook investor confidence in Palo Alto Networks and other leading cybersecurity companies.
Arora addressed the concerns in a blog post on March 30, saying that cybersecurity businesses should join forces in the industry’s “most consequential moment.” The CEO wrote that, “The stakes are high… The window to act is open, and we need to act swiftly with intent, together.”
Is PANW Stock a Buy?
Palo Alto Networks stock has a consensus Strong Buy rating among 30 analysts. That rating is based on 28 Buy and two Hold recommendations issued in the last three months. The average PANW price target of $213.62 implies 40% upside from current levels.
