BMO Capital analyst Keith Bachman is a “bit surprised” by the timing of Palo Alto Networks’ (PANW) acquisition of Chronosphere given the pending CyberArk (CYBR) deal. The leverage between Palo Alto and Chronosphere is less than that between Palo Alto and CyberArk, the analyst tells investors in a research note. BMO believes Chronosphere is well suited for workloads that require high scalability, but says the company does not have the breadth of features that Datadog (DDOG) or Dynatrace (DT) offer. However, some workloads do not require all the features, the firm adds. It thinks the artificial intelligence market can help generate more workloads and revenue for observability providers. The purchase price is “not cheap,” according to BMO, which keeps an Outperform rating on Palo Alto with a $230 price target.
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