NEW YORK, Jan 30, 2026, 12:54 p.m. ET — Regular session
- Palo Alto Networks shares climbed roughly 0.5% in midday trading
- Company finalized its acquisition of observability firm Chronosphere
- Investors are focused on the upcoming earnings report, seeking details on integration expenses and future guidance
Palo Alto Networks, Inc. shares ticked up roughly 0.5% to $177.15 on Friday, adding to a volatile week. The company confirmed it had finalized the acquisition of observability software maker Chronosphere. (PR Newswire)
That’s significant as security budgets tighten amid expanding cloud footprints and surging AI workloads, which generate massive streams of machine data. Vendors are pushing “platforms” — fewer products to purchase, fewer consoles to juggle — promising quicker reactions when systems falter.
Observability tools play a central role here. They monitor logs and performance metrics to identify outages and slowdowns, frequently tapping into the same data streams that security teams rely on to detect intrusions.
Nikesh Arora, chairman and CEO of Palo Alto, said enterprises are looking for “fewer vendors, deeper partnerships.” He described the Chronosphere acquisition as a step to integrate operations monitoring with security. According to Chronosphere, its telemetry pipeline can slash data volumes by “30% or more” and requires “20x less infrastructure” compared to older solutions. (Palo Alto Networks)
Financial details were not revealed on Thursday. Palo Alto struck a deal in November to acquire Chronosphere for $3.35 billion, aiming to close by the second half of fiscal 2026. The company is also moving forward with its roughly $25 billion purchase of identity-security firm CyberArk Software, which was announced in July. (Reuters)
The stock dropped 4.1% in the previous session and has been volatile on Friday, dipping to around $173 before rebounding. (StockAnalysis)
This acquisition pushes Palo Alto deeper into the crowded observability space, dominated by stalwarts like Datadog and Dynatrace, while major software vendors continue to bundle monitoring tools into their broader suites.
Still, there’s a risk in execution. Observability costs can balloon as data flows increase, and customers rarely ditch monitoring setups that already do the job — even if vendors tout automation and cost cuts.
Next on the agenda: guidance. Traders want to hear how Palo Alto intends to price observability, the anticipated integration costs, and if Chronosphere shifts the near-term margin outlook.
Market calendars currently list Palo Alto’s next earnings release for Feb. 12 after the close, but the company hasn’t officially confirmed the date. (Marketbeat)
