Jim Cramer is Bullish on Palo Alto (PANW) After Earnings Report

Palo Alto Networks, Inc. (PANW) reported strong fourth-quarter earnings on September 1, surpassing analyst expectations. Jim Cramer praised the company's results during his "Mad Money" show, noting that cybersecurity stocks have continued to rise despite the potential threat of artificial intelligence. Palo Alto Networks' revenue grew 34% year-over-year to $3.41 billion, with adjusted earnings per share at $1.02.

The company's Next-Generation Security (NGS) ARR increased 63% to $9.10 billion, while remaining performance obligations grew 34% to $21.2 billion. Management anticipates fiscal 2027 revenue between $14.10 billion and $14.20 billion, with adjusted earnings per share between $4.16 and $4.19. CEO Nikesh Arora highlighted that the company added nearly $1 billion in net new NGS ARR in the quarter, and AI adoption is driving cybersecurity priorities among CIOs.

The main concern is the slower growth rate expected in fiscal 2027, which may lead to a premium valuation facing pressure if organic growth or acquisition benefits diminish. Despite the positive earnings, shares fell 9.3% on September 2. Institutional interest remains steady, with 89 hedge funds holding PANW in Q2 2026, up from 87 in Q1.