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Palo Alto Networks (NASDAQ:PANW) remains to be Morgan Stanley’s prime cyber safety inventory after the funding agency completed its newest AlphaWise survey, which highlighted “sturdy” firewall demand as enterprises proceed to see extra distributed and hybrid IT networks.
A gaggle of analysts, led by Hamza Fodderwala, famous that Palo Alto Networks (PANW) is more likely to hold benefiting as it’s within the “early innings” of an enterprise refresh cycle, in line with the most recent survey.
Palo Alto Networks (PANW) shares fell barely lower than 0.5% to $490.57 in early buying and selling on Wednesday.
The survey confirmed that the sturdiness for firewall demand remains to be “under-appreciated” by buyers as community safety remains to be the highest of the listing for the overwhelming majority of CIOs this 12 months, and spending is more likely to improve this 12 months in comparison with final 12 months.
The analysts assume this is because of plenty of causes, together with:
- An more and more distributed workforce, digital connectivity and hybrid IT networks” which have resulted in larger site visitors and latency.
- A “robust” equipment refresh, as the typical refresh cycle remains to be between three and 4 years and “way more frequent” than different areas of networking.
- The newest enterprise equipment refresh occurred between 2018 and 2019, which means that the sector remains to be within the “early innings” of the present cycle, which is anticipated to final a minimum of 12-18 months.
- Lastly, there are an rising variety of use circumstances for firewalls, together with micro-segmentation, SD-WAN and extra OT safety to assist safe connectivity.
Along with the continued surge being useful for Palo Alto Networks (PANW), the analysts additionally word it is more likely to profit Fortinet (FTNT) as effectively, which they imagine will proceed to achieve share in firewalls and “broader platform aiming to consolidate safety & networking spend.”
Earlier this month, funding agency Wedbush Securities mentioned buyers ought to deal with “secular winners” reminiscent of Palo Alto Networks (PANW) as valuations come down and the rise of continued geopolitical threats all over the world.
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