PANW stock faces pressure due to high expectations despite strong fundamental growth in revenue and customer inquiries.

Okay, let's talk about another one that had high expectations coming into its results, and that's Palo Alto Networks. Those shares are under a little bit of pressure, but look, um I mean, the stock was about double uh year-to-date uh in terms of its performance.

Yeah, bought a little bit higher there, and maybe the move was already built into the shares based on the fact of what we saw the uh their stock did after CrowdStrike and Okta earnings last week.

It rallied, right? Uh sitting just below record highs,

but revenue was up 34% year-over-year, uh just beat estimates. Um $3.41 billion is what they came in at. Estimates was about $3.35 billion. So, beat a little bit there. Uh next-generation security, the annual recurring revenue, $9.1 billion.

That was up 63% year-over-year. And those RPOs, those remaining performance obligations, were up 34% on a year-over-year basis to $21.2 billion.

EPS came in about 7 cents above uh expectations at $1.2 per share. Uh free cash flow margins hit 38.4% uh for the full fiscal year in 2026.

They did slightly raise guidance, uh and they expect n- uh NGS ARR to be about in line. So, this wasn't a spectacular beat, but I think more than anything, Diane, the bar was really high.

But the CEO uh did come out and basically state that the amount of inquiries that they had this quarter continues to grow. I think it was over 2,000. Last quarter was about 1,200 inquiries from some of their customers about these cybersecurity breaches and the potential as AI continues to ramp up,

but yeah, you can't really fault what's going on with Palo Alto. I just think the bar is a little bit higher on this one.