Palo Alto (PANW) Loses 6.8% as Impressive Earnings Priced In

SelfRugger · 2026-02-19T14:42:49+00:00

Palo Alto Networks (PANW) shares fell 6.82% despite reporting impressive earnings for Q2 2026, as investors had already anticipated strong performance. The company projected strong revenue growth for the upcoming quarter while acknowledging the attractiveness of other AI stocks.

SelfRugger

2026-02-19 14:42:49

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Palo Alto (PANW) Loses 6.8% as Impressive Earnings Priced In

Angelica Ballesteros

Thu, February 19, 2026 at 11:25 PM GMT+9 2 min read

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PANW

-2.38%

We recently published 10 Losing Stocks in an Otherwise Optimistic Market. Palo Alto Networks Inc. (NASDAQ:PANW) was one of the worst performers on Wednesday.

Palo Alto tumbled by 6.82 percent on Wednesday to close at $152.35 apiece, as investors appeared to have already priced in a strong earnings performance in the second quarter of fiscal year 2026 prior to the official results.

In an updated report, Palo Alto Networks Inc. (NASDAQ:PANW) said that net income in the second quarter ending December 31 increased by 62 percent to $432 million from $267 million in the same period a year earlier. Total revenues jumped by 15 percent to $2.59 billion from $2.26 billion year-on-year.

In the six-month period, net income increased by 24 percent to $766 million from $618 million, while revenues jumped by 15 percent to $5.07 billion from $4.4 billion.

Palo Alto (PANW) Loses 6.8% as Impressive Earnings Priced In

“We saw continued strength in platformizations, a trend that is accelerating due to AI—customers are keen to both modernize and normalize their cybersecurity stack, aligning them to our approach. We also saw steady and strong adoption of AI security, which we expect will be a long-term trend,” said Palo Alto Networks Inc. (NASDAQ:PANW) Chairman and CEO Nikesh Arora.

Looking ahead, Palo Alto Networks Inc. (NASDAQ:PANW) is targeting revenues in the range of $$11.28 billion to $11.31 billion, representing year-on-year growth of 22 to 23 percent. Diluted non-GAAP net income per share is also pegged at $3.65 to $3.70.

For the third quarter ending March, total revenues are projected at $2.941 billion to $2.945 billion, or an implied growth of 28 to 29 percent. Diluted non-GAAP EPS is expected at $0.78 to $0.80.

While we acknowledge the potential of PANW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey****.****

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