1 No-Brainer Artificial Intelligence (AI) Stock to Buy With $160 and Hold for the Long Term

Core Insights - Palo Alto Networks is experiencing significant growth as it addresses the increasing threats in the cybersecurity landscape, with severe cyberattacks occurring four times faster than a year ago [2][4] - The company is integrating artificial intelligence into its cybersecurity products to enhance efficiency and effectiveness in combating cyber threats [6][10] Financial Performance - In the fiscal 2026 second quarter, Palo Alto generated $2.6 billion in total revenue, marking a 15% increase year-over-year, with its next-generation security (NGS) portfolio growing over twice as fast [12][13] - The annual recurring revenue (ARR) for NGS reached $6.3 billion, reflecting a 33% growth [12] - The company has raised its full-year revenue forecast to $11.3 billion, a 23% increase from the previous year, with NGS ARR expected to grow by 54% to $8.6 billion [13] Product and Market Strategy - Palo Alto's Cortex XSIAM platform automates security operations, allowing 60% of its customers to remediate threats in under 10 minutes, a significant improvement from previous response times [7] - The company emphasizes "platformization," encouraging businesses to consolidate their cybersecurity needs with a single vendor to fill security gaps effectively [9][10] - As of the end of the fiscal 2026 second quarter, 1,550 customers were considered "platformed," a 35% increase from the previous year, with a net revenue retention rate of 119% [14][15] Competitive Positioning - Palo Alto's stock is currently trading at a price-to-sales (P/S) ratio of 11.1, which is 50% lower than its main competitor, CrowdStrike [16] - The NGS segment of Palo Alto generates more ARR than CrowdStrike's entire business, which is around $4.9 billion, and Palo Alto's NGS ARR grew by 33% compared to CrowdStrike's 23% [18] - Management believes there is potential for significant growth, aiming to triple NGS ARR to $20 billion by fiscal 2030, indicating a strong long-term investment opportunity [19]