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Palo Alto Networks (PANW) shares are inching lower on Friday after a leaked Anthropic document revealed a breakthrough artificial intelligence (AI) model with advanced cybersecurity capabilities — Claude Mythos. As of this writing, PANW sits well below its major moving averages (MAs), indicating bears are firmly in control across multiple timeframes.
Versus its year-to-date high, Palo Alto Networks stock is now down nearly 25%.
Why Palo Alto Networks Stock Slipped on Friday
The Claude Mythos leak is bearish for PANW shares as it strikes right at the heart of the company’s “platformization” narrative.
According to the leaked draft, the next-gen AI model achieved “unprecedented” scores in software and cybersecurity reasoning, with Anthropic reportedly warning that it could “far outpace” human defenders.
Investors fear that if frontier AI labs can bake high-level security into foundational models, the need for expensive third-party firewalls and endpoint protection from vendors, including Palo Alto Networks, would diminish.
This AI substitution narrative signals a future where security is a native AI feature, not a standalone service, threatening PANW’s long-term pricing power.
The Case for Buying PANW Shares on the Dip
Despite the headline risk, PANW’s underlying fundamentals warrant an investment in 2026.
In February, the Nasdaq-listed firm posted a market-beating Q4, with Next-Generation Security (NGS) annual recurring revenue (ARR) up 33% year-over-year.
At a toned-down valuation of less than 14x sales, Palo Alto Networks shares appear rather attractive, especially since many analysts argue AI will eventually prove a tailwind for cybersecurity leaders.
Why? Because as AI-enabled attacks become more sophisticated, enterprises may accelerate their consolidation onto PANW’s integrated XSIAM platform to achieve a real-time, autonomous response that legacy human-led systems can’t provide.
Note that Palo Alto Networks has a history of closing each month from April to September in green, a seasonal pattern that makes it even more attractive to own in the near-term.
What’s the Consensus Rating on Palo Alto Networks?
Wall Street analysts also remain uber bullish on PANW stock for the remainder of 2026.
The consensus rating on Palo Alto Networks sits at a “Strong Buy” currently, with the mean target of about $208 indicating potential upside of more than 40% from here.
