Palo Alto Networks shares surged Tuesday after Wall Street analysts said it’s time to consider buying the stock after its recent pullback. The news In a note to clients, Morgan Stanley said there’s an “increasingly attractive entry point” in Palo Alto stock after a lackluster start to 2025. The analysts, who raised their price target to $230 from $223, forecasted the share price could double in the next four to five years. The catalysts they cited include larger deals and more market share gains. “Given tighter overall [client IT] budgets and a highly fragmented security landscape, the desire for vendor consolidation is at an all-time high,” Morgan Stanley wrote. “PANW remains the leading beneficiary of consolidation with a broader platform covering multiple security pillars.” The analysts said, “As PANW soon becomes the first pure-play security company to reach $10B in annualized revenue, the key investor concern is whether the company can continue to grow organically at a rate above [the] overall market on a much larger revenue base. We take a more positive view and see a long runway of share gain driving 15%+ topline growth, resulting in revenue, [free cash flow] and the stock to double by FY30.” Palo Alto Networks shares jumped 3.6% to just over $183 each after the Tuesday call from Morgan Stanley. While riding an upswing since last week, the stock has only gained 0.7% year to date versus the S & P 500 ‘s 2.8% advance in 2025. While dropping more than 9% since its closing high of $202.95 on Dec. 6, Palo Alto stock has still crushed it in recent years — gaining 23% last year and more than doubled in 2023. PANW 5Y mountain Palo Alto Networks 5 years Big picture The demand for cybersecurity offerings has never been higher. Each day, it seems like there is a headline about a high-profile hack or virtual breach of some of the largest U.S. companies’ computer systems. American Water Works , the country’s biggest water utility, revealed late last year that it had been impacted by a cyberattack. Prior to that, Change Healthcare, the largest healthcare payment processor in the U.S., also fell victim to a ransomware attack in 2024. Change is a unit of UnitedHealth . Although unfortunate, the elevated threat environment bodes well for the sales for Palo Alto and cyber peer CrowdStrike . Both are Club holdings. Bottom line Unlike Morgan Stanley, the Club isn’t recommending members buy more Palo Alto Networks shares at these levels. In fact, we decided to sell some on Jan. 8 after analysts at Guggenheim, BTIG, and Deutsche Bank each downgraded the stock. Although Palo Alto Networks appears to have fallen out of favor with some on Wall Street, that doesn’t mean we have lost our conviction. Increased demand for cyber protection, coupled with Palo Alto CEO Nikesh Arora’s exceptional track record in leadership, means we’re staying invested. To be sure, CrowdStrike is the better cyber play right now. Despite last year’s software update glitch that caused a global information technology meltdown, shares of CrowdStrike were able to recover quickly. Jim Cramer described CrowdStrike as the “one you want to own.” He added, “CrowdStrike is the one that gets a free pass this year. Everyone thinks they’ve been playing defensive. I think they’re going to talk about playing offensive.” (Jim Cramer’s Charitable Trust is long PANW, CRWD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
In this photo illustration the Palo Alto Networks logo seen displayed on a smartphone and on the background.
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Palo Alto Networks shares surged Tuesday after Wall Street analysts said it’s time to consider buying the stock after its recent pullback.
