We recently compiled a list of the 15 AI News Shaping Wall Street Today. In this article, we are going to take a look at where Palo Alto Networks, Inc. (NASDAQ:PANW) stands against the other AI stocks that are shaping Wall Street today.
In recent news reported by Reuters, a U.S. congressional commission proposed a Manhattan Project-style initiative to fund the development of AI systems that will be as smart, or even smarter, than humans. The proposition is amid the intensifying competition from China over advanced technologies.
“We’ve seen throughout history that countries that are first to exploit periods of rapid technological change can often cause shifts in the global balance of power. China is racing towards AGI … It’s critical that we take them extremely seriously”
– Jacob Helberg, a USCC commissioner told Reuters
Helberg, while recognizing that energy infrastructure is a significant bottleneck for training large AI models, suggests that streamlining the permitting process for data centers is one way of enabling a public-private partnership that could accelerate AI development.
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This news follows a rumor that artificial intelligence models are hitting a “wall”. Separate sources, including Reuters, The Information, and Bloomberg, have reported that companies such as OpenAI are failing in their next endeavors. Unnamed sources have claimed that OpenAI’s Orion is “so far not considered to be as big a step up from OpenAI’s existing models as GPT-4 was from GPT-3.5.”
However, OpenAI is pushing back on these rumors, stating that there is “no wall”. Despite having not reached a wall, analysts do admit that it’s possible to have reached a turning point.
“We haven’t seen a breakthrough model in a while. Part of it is that we’ve exhausted all the human data, and so just throwing more compute at the same data may not yield better results.”
– Gil Luria, managing director at investment group D.A. Davidson
Gary Marcus, NYU professor emeritus and outspoken critic of AI hype, has this to say:
“The economics are likely to be grim. LLMs will not disappear, even if improvements diminish, but the economics will likely never make sense…”
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A cutting-edge computer lab full of IT experts monitoring the security of multiple systems.
Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) offers cybersecurity solutions for all apps, users, and devices. Precision AI, Palo Alto Networks’ proprietary AI system, plays a key role in detecting and mitigating cybersecurity threats.
On Tuesday, November 19, Wedbush analyst Daniel Ives maintained a Buy rating on Palo Alto Networks, Inc. (NASDAQ:PANW) with a price target of $400.00. The company will report its fiscal first-quarter results on November 20 after markets close, and while Wedbush Securities isn’t expecting any “major fireworks”, it does anticipate the company to plant “seeds of growth” for 2025. With Palo Alto accelerating its platformization strategy, Ives expects next-generation security annual recurring revenue to increase with the company landing higher ARR deals, hitting $15B in next-generation security ARR by 2030. Moreover, artificial intelligence is also expected to play a key role, given its recent AI suite of products, including Access, security posture management, and runtime. As per Ives, they “continue to generate greater scale foundation for platformization in place to accelerate throughout 2025”.
“We have seen stronger deal flow and believe PANW is getting their sea legs on the platform strategy now front and center for cybersecurity customer deployments. While not expecting major fireworks on Wednesday after the bell with FY1Q25 earnings, we view the seeds of growth are now in place for a very important FY25”.
-Analyst Dan Ives wrote in a note to clients.
Overall PANW ranks 10th on our list of the AI stocks that are shaping Wall Street today. While we acknowledge the potential of PANW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PANW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.