PANW Stock Falls 5 Percent And Reverses After Hours On Earnings

Palo Alto Networks had a strange Tuesday, the stock fell 5.25 percent during the regular session as investors worried the company's nearly 90 percent year-to-date run had priced in too much, then reversed almost the entire decline in after-hours trading after the numbers arrived.

Q4 adjusted EPS came in at $1.02, beating the $0.98 estimate. Revenue hit $3.41 billion, up 34 percent year over year and above the $3.35 billion consensus.

Next-generation security annual recurring revenue grew 63 percent to $9.1 billion. Full-year fiscal 2027 guidance of $14.10 to $14.20 billion in revenue surpassed the $13.79 billion consensus by $300 million.

First-quarter guidance of $3.30 to $3.31 billion cleared estimates by nearly $100 million.

The growth engine is AI. Anthropic's Mythos launch, the first-ever Mythos-class model, triggered a wave of corporate alarm about agentic AI security risks, and CEO Nikesh Arora said the company has now held more than 2,000 customer briefings on the subject. "This is a long-term tailwind," he told CNBC. "It will not happen in one quarter, and it will not happen in two."

Palo Alto also announced the acquisition of Console, an AI-native platform for agentic security operations.

The stock closed at $362, fell to $355 after hours before the numbers, then rebounded toward $380 once they landed.