AI hacking is the norm! Palo Alto Networks (PANW.US) became the biggest winner, and the 2027 guidance completely exceeded expectations

The Zhitong Finance App learned that cybersecurity company Palo Alto Networks (PANW.US) has released a full-year profit outlook that exceeds Wall Street expectations, mainly due to the strong protection requirements of major companies to withstand increasingly advanced artificial intelligence systems. According to financial reports, the company's revenue for the fourth quarter of fiscal year 2026 reached US$3.41 billion, up 34.3% year over year, exceeding expectations of US$60 million; adjusted earnings per share were US$1.02, exceeding expectations of US$0.04.

The company said in a statement on Tuesday that it expects adjusted earnings per share for the 2027 fiscal year of $4.16 to $4.19. This figure is higher than Wall Street's average estimate of $4.11.

The next-generation security business is expected to have annual recurring revenue (ARR) of $11.075 billion to $11.175 billion, an increase of 22% to 23% year over year, which is also higher than market expectations.

Remaining performance obligations were $25.2 billion to $25.4 billion, an increase of 19% to 20% over the previous year.

By Tuesday's close, Palo Alto Networks had a cumulative increase of 97% this year, significantly outperforming the 11% increase in the S&P 500 index over the same period.

The company also separately announced on Tuesday that it has acquired Console, which aims to help enterprises build AI agents to automate internal IT tasks.

Cybersecurity stocks have continued to rise in recent months as concerns about AI-driven attacks and data breaches have intensified. Last week, CrowdStrike's third-quarter earnings outlook surpassed analysts' expectations; at the same time, Okta Inc. raised its annual revenue outlook for the second time in the year and recorded a record number of outstanding orders.

As it turns out, some AI models are becoming increasingly skilled at independently carrying out hacking attacks. Anthropic PBC, OpenAI, and Meta Platforms Inc. have all revealed in recent weeks that their models broke through test environments, accessed the open internet, and invaded real-world victim systems during testing.

Even before such incidents occurred, Anthropic decided to limit its release this spring due to concerns that the Mythos model hacker attack was too powerful, a move that raised the alarm of government and security officials.

CEO Nikish Arora said, “Recent advances in AI are moving cybersecurity to the top of the CIO's (CIO) priority list and will be a long-term driver.”

As the strong momentum of the fourth quarter continues, the company also presented a higher-than-expected sales outlook for the first quarter of fiscal year 2027. The company expects revenue to be between $33 billion and $33.1 billion, compared to analysts' expectations of $32.1 billion.

The company's initial success was based on firewalls — a security tool for monitoring traffic in and out of a computer network. Today, the company is one of the world's largest suppliers of cybersecurity products, and is increasingly shifting its focus to protecting enterprises from AI-related threats.