⚠ A Tool That Rattled InvestorsModerate threat

Palo Alto Networks (PANW) — threat to the moat

An AI code-scanning tool knocked Palo Alto's shares down in early 2026, and the company is betting that AI creates more security work than it removes.

The newest threat to Palo Alto arrived as a product announcement from an AI company. CNBC reported that "In February, Anthropic revealed a tool capable of scanning code vulnerabilities that rattled investors"1. By the end of March, Palo Alto's shares had "dropped 16% this year"2.

Palo Alto share price at three points in 2026 ($)147.69Feb buyback average331.8331 July close374.7425 Sep closeForm 8-K of 11 March 2026; stockanalysis market data
The AI scare was bought back.

The worry is simple. If AI models can find and fix vulnerabilities, some of what security vendors sell becomes a feature of the tools developers already use. Palo Alto's own risk factors acknowledge the other side of it: "The emergence of AI agents as a new class of identity presents both opportunities and risks"3.

Palo Alto bought its own shares in the middle of the fall, about 6.8 million at an average $147.694, and the stock closed at $374.74 on 25 September 20265. The market has so far taken the opportunity side.

The share price swing within a year shows how much the AI question weighs. The shares traded between $139.57 and $398.88 over the 52 weeks to 25 September 20266. The chief executive bought about $10 million of stock in March 2026, his first purchase since November 20197, which suggests management took the opposite view of the scare.

The risk has not been disproved, only postponed. NGS ARR growth is the number that would show it; if fiscal 2027 growth falls well below the guided 22% to 23%8, the AI tools will have started taking work that security vendors used to be paid for.

References
  1. ReportedCNBC reported that "In February, Anthropic revealed a tool capable of scanning code vulnerabilities that rattled investors".
    CNBC on 30 March 2026 - Nikesh Arora's first share purchase since November 2019, about $10 million, after an Anthropic code-scanning tool rattled investors. — March 2026 · publ. 30 March 2026 · source ↗
  2. ReportedBy the end of March, Palo Alto's shares had "dropped 16% this year".
    CNBC on 30 March 2026 - Nikesh Arora's first share purchase since November 2019, about $10 million, after an Anthropic code-scanning tool rattled investors. — March 2026 · publ. 30 March 2026 · source ↗
  3. ReportedPalo Alto's own risk factors acknowledge the other side of it: "The emergence of AI agents as a new class of identity presents both opportunities and risks".
    Palo Alto Networks Form 10-K for fiscal 2026 (year ended 31 July 2026) - Item 1A risk factors, Israel, supply and legal proceedings. — FY2026 · publ. 10 September 2026 · source ↗
  4. ReportedPalo Alto bought its own shares in the middle of the fall, about 6.8 million at an average $147.69, and the stock closed at $374.74 on 25 September 2026.
    Palo Alto Networks Form 8-K - repurchase of about 6.8 million shares at an average $147.69 and a new $1.0 billion authorisation. — March 2026 · publ. 11 March 2026 · source ↗
  5. ReportedPalo Alto bought its own shares in the middle of the fall, about 6.8 million at an average $147.69, and the stock closed at $374.74 on 25 September 2026.
    Palo Alto Networks (PANW) market data - $374.74 at the close on 25 September 2026, market value $306.54 billion, trailing P/E 998.49, forward P/E 89.46, 52-week range $139.57-$398.88. — September 2026 · publ. 25 September 2026 · source ↗
  6. ReportedThe shares traded between $139.57 and $398.88 over the 52 weeks to 25 September 2026.
    Palo Alto Networks (PANW) market data - $374.74 at the close on 25 September 2026, market value $306.54 billion, trailing P/E 998.49, forward P/E 89.46, 52-week range $139.57-$398.88. — September 2026 · publ. 25 September 2026 · source ↗
  7. ReportedThe chief executive bought about $10 million of stock in March 2026, his first purchase since November 2019, which suggests management took the opposite view of the scare.
    CNBC on 30 March 2026 - Nikesh Arora's first share purchase since November 2019, about $10 million, after an Anthropic code-scanning tool rattled investors. — March 2026 · publ. 30 March 2026 · source ↗
  8. ReportedNGS ARR growth is the number that would show it; if fiscal 2027 growth falls well below the guided 22% to 23%, the AI tools will have started taking work that security vendors used to be paid for.
    Palo Alto Networks fourth-quarter and fiscal 2026 results release, Form 8-K exhibit 99.1 - income statement, non-GAAP reconciliation, balance sheet, cash flow, Next-Generation Security ARR, remaining performance obligations and fiscal 2027 guidance - fiscal 2027 guidance and long-term targets. — Q4 FY2026 · publ. 1 September 2026 · source ↗
Sources
Generated September 26, 2026