Palo Alto Networks positioned to gain from expected surge in cybersecurity spending
David Friedberg said on the All-In podcast that Fortune 50 CEOs are increasingly worried about cyber defense, which could drive much larger security budgets. Palo Alto Networks is viewed as a leading candidate to capture that spending, though analysts have not yet modeled a sharp budget increase. The stock trades at a high forward revenue multiple, which is the main risk.
David Friedberg, speaking on the All-In podcast, relayed that Fortune 50 chief executives in Washington are deeply concerned about cyber defense, suggesting security budgets may expand sharply. He specifically mentioned Palo Alto Networks as a likely beneficiary.
Consensus estimates from 47 analysts put Palo Alto’s revenue at $11.5 billion in fiscal 2026 and $16.2 billion in fiscal 2028, with growth decelerating to roughly 14% in the final year. The CyberArk acquisition, closed partway through fiscal 2026, adds a full year in fiscal 2027. CrowdStrike’s revenue rose from $1.45 billion to $4.81 billion over four fiscal years, though growth slowed from 55% to 22%. Palo Alto’s enterprise value is 23.2 times forward revenue, above its 11.0x five-year average.
If cyber budgets rise, large enterprises, their customers, employees, and critical infrastructure providers could benefit from stronger defenses. Palo Alto and rivals may gain revenue, but high valuation could expose investors to volatility if spending doesn't accelerate. Society may see better protection against AI-enabled attacks, though costs could be passed to consumers and smaller firms may struggle to keep pace.