PANW stock tumbled about 8% on Wednesday, after Palo Alto Networks announced a $25 billion deal to acquire CyberArk Software.
The mix of cash and stock makes it Palo Alto’s biggest acquisition yet and a major push into the identity security space.
Under the terms, CyberArk shareholders will get $45 in cash and 2.2005 Palo Alto shares for each CyberArk share they hold.
That values the deal at a 26% premium to CyberArk’s 10-day average stock price before July 25.
While the acquisition signals Palo Alto’s bet on identity protection as the next frontier in cybersecurity, especially as AI-driven threats grow, the investors reacted with caution, likely digesting the size of the deal and potential integration risks.
PANW stock dips, but management remains confident
The market didn’t exactly cheer the news.
Palo Alto’s stock dropped sharply, sliding from around $193 to $177 in a single session.
CyberArk, which had rallied earlier in the week on buyout rumors, gave up some gains, trading 0.69% down at $431.47.
Still, the move fits with CEO Nikesh Arora’s broader vision as he has been steering Palo Alto beyond its firewall roots toward becoming a full-stack cybersecurity powerhouse.
Bringing CyberArk into the fold gives Palo Alto a strong foothold in identity security, a space that’s becoming more critical as companies grapple with threats from not just humans, but also machines and emerging AI agents.
By adding CyberArk’s AI-driven platform, the company hopes to sharpen its edge in managing privileged access across the board, a key piece of the evolving cybersecurity puzzle.
What analysts say?
Most analysts are calling the CyberArk acquisition a bold and strategic move by Palo Alto.
Some even describe it as a ‘home run,’ a critical step in the company’s push to become a one-stop shop for enterprise cybersecurity, especially as AI-driven threats become more sophisticated.
As per TipRanks, Wall Street has a ‘Moderate Buy’ consensus rating on PANW stock based on 27 ‘Buy’, 7 ‘Hold’, and 1 ‘Sell’ ratings in the past three months. The average price target is kept at $216, which is 11.3% upside potential.
CyberArk’s recent numbers don’t hurt either; the company posted 46% revenue growth last quarter, with earnings beating analyst expectations, which adds a layer of confidence for supporters of the deal.
That said, not everyone is sold just yet.
The $25 billion price tag has raised eyebrows among investors, many of whom are wary of the near-term costs involved.
Some see the stock dip as a reflection of that unease, not a rejection of the strategy, but a wait-and-see on how smoothly the integration plays out.
The deal is expected to close in the second half of fiscal 2026, pending the usual regulatory and shareholder sign-offs.
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