Palo Alto Networks Stock Outlook [Latest as of September] | Will the Partnership with NTT DATA Accelerate AI Security Growth?

Palo Alto Networks reported fiscal 2026 fourth-quarter revenue of $3.41 billion, up 34% year on year, and adjusted EPS of $1.02, exceeding market expectations. ARR for its subscription-based next-generation security business reached $9.1 billion, up 63%, demonstrating continued ARR growth. Meanwhile, the company posted a GAAP loss of $282 million, as acquisition-related expenses and integration costs weighed on near-term earnings.

The company issued a growth outlook calling for fiscal 2027 revenue of approximately $14.1 billion to $14.2 billion, with room for medium- to long-term growth amid expanding demand for AI-powered security. The stock became volatile at times following the earnings release, but margin improvement and stronger cash-generation capabilities remain key focuses for investors. Sustained ARR growth and new-customer acquisition could determine the company’s future growth.

The strategic partnership with NTT DATA is attracting attention as a potential catalyst for accelerating joint business development in the cybersecurity market in the AI era. The partnership will span multiple years, with a target of $1 billion in joint business by 2029. Leveraging NTT DATA’s global customer base and implementation support capabilities is expected to drive expansion into the large-enterprise and public-sector markets and increase growth opportunities in Asia. The partnership covers areas including AI security, threat intelligence, cloud protection and managed services.

Palo Alto Networks’ growth scenario will hinge on rising demand for AI security, expansion of its cloud security business and the benefits of collaboration with NTT DATA. In particular, demand is expected to grow for integrated security services such as zero trust and SASE, centered on the Prisma series of cloud protection services and the AI-enabled Cortex series.