Thanks to another around of bubble fears impacting artificial intelligence, even cybersecurity entities — such as Palo Alto Networks (PANW) — have felt the heat. In a way, the downturn affecting PANW stock represents a cruel irony. Whereas the main narrative focuses on excessive capital expenditure toward AI hype, in Palo Alto’s case, machine intelligence’s proven prowess has become the lynchpin.
Essentially, the rapid adoption of enterprise AI is fueling an unprecedented surge in cloud security risks; namely, Palo Alto recently presented a report that digital intelligence itself is driving a massive expansion of the cloud attack surface. One of the main problems is that generative AI can generate insecure code faster than security teams can review it, leading to widespread vulnerabilities.
Put another way, for most investments, the concern is that capital inflows toward machine intelligence have become excessive and divorced from the actual fundamentals. In contrast, in the cybersecurity realm, AI is too effective, creating headwinds that cannot be adequately addressed under current bandwidth limitations.
Given this context, it’s not too surprising that PANW stock hasn’t performed that well this year. Since the January opener, the security has only gained less than 1%. What’s also problematic is the Barchart Technical Opinion indicator, which rates PANW as a 40% Sell — not exactly a ringing endorsement.
Still, it might be premature to give up on Palo Alto. First, if we look at options flow, we’ll note that big block transactions this month have mostly been bullish on a cumulative basis. That’s not say that there weren’t bearish transactions because a few did materialize. Overall, though, net trade sentiment has been positive.
What’s also intriguing is Barchart’s Expected Move calculator. Based on the latest implied volatility (IV) data — which is a residual value stemming from actual option flows — the price range is forecasted to land between $165.35 and $201.54 for the Feb. 20, 2026 expiration…
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