New York, Feb 27, 2026, 16:08 (EST) — Trading has shifted to after-hours.
Palo Alto Networks slipped 1% to $147.92 by the close on Friday, retreating after Thursday’s bounce. The shares dipped to $143.67 at their lowest during a volatile session. Investing.com
This shift is getting attention because cybersecurity names have turned into a barometer for corporate tech spending, especially with investors already skittish over software valuations and the uncertain impact of AI on budgets. Friday brought a broader slump in both tech and financial stocks after the U.S. Producer Price Index surprised to the upside—a hotter print on wholesale inflation that can rattle rate-cut expectations fast. Reuters
Zscaler shares dropped roughly 9% after hours, following a wider net loss for the quarter as spending climbed. CEO Jay Chaudhry pointed to “AI is driving demand for security,” though customers remain cautious with their budgets. Reuters
Palo Alto is back in focus after trimming its annual profit outlook last week, citing steeper integration expenses from recent acquisitions—most notably the $25 billion CyberArk purchase. “The profitability ‘cut’ is mostly due to the firm’s acquisitions,” said Malik Ahmed Khan, analyst at Morningstar. He noted that Palo Alto might still squeeze more value from these deals through cross-selling to its existing clients. Reuters
Investors are juggling two conflicting narratives: an aggressive push into new products through a string of deals, and the immediate hit to margins from integrating those acquisitions. The pitch leans on identity security and cloud monitoring, but it’s not clear yet how much patience the market will show.
Much of the group’s recent buzz centers on how things are framed. “Zero trust”—where every connection is verified, rather than just trusting anyone inside the perimeter—has basically become the go-to term. Add to that, fresh AI tools are muddying the waters, reshuffling which pieces of security get more affordable and which ones get trickier.
The rate channel’s another piece. High inflation surprises? Long-duration growth names usually get knocked down first—software stocks often lead the way lower. Palo Alto hasn’t dodged that.
Bears face a lingering threat: security budgets might hold up better than other IT spending, particularly given a run of headline-grabbing breaches, and customers continue moving toward fewer, more centralized platforms. Bulls, on the other hand, have a more straightforward headache—those integration expenses could keep running high for longer than expected, while closing customer deals drags out.
The big macro focus lands next week. Eyes are on the U.S. jobs numbers, set for release March 6, plus late-stage earnings from Broadcom. Investors are gauging whether another rate-cut rethink is in the cards—and if that could take the heat off software and cybersecurity stocks. Reuters
