Stephanie Link, Chief Investment Strategist at Hightower, has selected Palo Alto Networks for Q1 2026, citing an expected 18% year-over-year increase in subscription revenue. Her analysis forecasts non-GAAP operating margins expanding from 20% in fiscal 2025 to 22.5% in fiscal 2026, driven by scaled cloud deployments and ongoing cost‐efficiency initiatives.

Link points to accelerated demand for Palo Alto’s AI-powered threat detection tools, with enterprise licensing orders rising 30% in the past two quarters. The company’s Prisma Cloud module, which leverages machine learning for real-time anomaly detection, saw seat counts grow to over 15,000 organizations, up from 11,500 at the start of fiscal 2025.

Over the last 12 months, Palo Alto has completed three key acquisitions—an identity-management specialist, a cloud-security analytics firm and an endpoint response startup—adding an estimated $120 million in annualized revenue. These deals are expected to boost cross-sell opportunities, with Link forecasting a 25% increase in multi-product customers by mid-2026.

Industry M&A activity has risen 25% year-to-date, and Palo Alto stands to benefit as smaller cybersecurity vendors seek partnerships. Link notes that the company’s balance sheet, with $3.7 billion in cash and equivalents, positions it to lead consolidation efforts, reinforcing its position as the sector’s top pure-play cybersecurity vendor.