Palo Alto Networks to acquire AI security firm Protect AI

SANTA CLARA, Calif. - Palo Alto Networks (NASDAQ: PANW), a prominent player in global cybersecurity with a market capitalization of $118.5 billion, announced today its plans to acquire Protect AI, a company specializing in the security of Artificial Intelligence (AI) and Machine Learning (ML) applications. This move aims to enhance Palo Alto Networks’ AI security capabilities and address the emerging threats in the AI landscape. According to InvestingPro data, the company has demonstrated strong market performance with a 23% return over the past year.

The acquisition is expected to close by the first quarter of fiscal 2026, subject to regulatory approvals and other customary closing conditions. Protect AI’s solutions and team are set to join Palo Alto Networks, augmenting its Prisma AIRS platform, which offers comprehensive protection throughout the AI development lifecycle.

As AI applications become more integral to businesses, they introduce unique risks that traditional security tools may not address. Protect AI has made strides in securing AI from development to runtime, tackling vulnerabilities that could be exploited through model manipulation, data poisoning, and prompt injection attacks.

Anand Oswal, SVP and GM at Palo Alto Networks, stated, "By extending our AI security capabilities to include Protect AI’s innovative solutions for Securing for AI, businesses will be able to build AI applications with comprehensive security." He emphasized the importance of this acquisition in enabling customers to deploy AI with confidence.

Ian Swanson, Co-Founder & CEO of Protect AI, expressed enthusiasm about joining Palo Alto Networks, highlighting the opportunity to scale their mission and amplify their impact globally.

The acquisition underscores Palo Alto Networks’ commitment to continuous innovation in cybersecurity. With annual revenue reaching $8.57 billion and a robust gross profit margin of 74%, the company continues to demonstrate strong financial fundamentals. It also aligns with the company’s focus on providing AI-powered security solutions across various domains, supported by the expertise and threat intelligence of Unit 42. InvestingPro subscribers can access 29 additional analyst insights and comprehensive financial metrics about PANW’s growth trajectory.

Palo Alto Networks advises interested parties to learn more about Protect AI and Prisma AIRS by registering for the "Hello Tomorrow" livestream event scheduled for Tuesday, April 29, 2025, at 2:30PM PT.

This strategic move is based on a press release statement and is part of Palo Alto Networks’ broader efforts to protect digital environments as AI becomes more prevalent in business operations. While the company maintains strong operational metrics, InvestingPro analysis indicates the stock is currently trading above its Fair Value, with notably high earnings and EBITDA multiples. Investors can access detailed valuation analysis and over a dozen additional ProTips through InvestingPro’s comprehensive research reports.

In other recent news, Palo Alto Networks has announced surpassing $1.5 billion in cumulative sales on Google Cloud Marketplace, highlighting its role in advancing secure cloud and AI adoption. The company offers a suite of AI-driven security solutions through its partnership with Google Cloud, which has been recognized with several Partner of the Year awards. Meanwhile, KeyBanc Capital Markets has reiterated its Overweight rating on Palo Alto Networks with a price target of $240, expressing confidence in the company’s growth strategy and its focus on NextGen Security components.

UBS maintained a Neutral rating on Palo Alto Networks, with a price target of $200, amid reports of potential talks to acquire AI security firm Protect AI for an estimated $650-$700 million. This acquisition, if confirmed, would mark a significant move in the AI security sector for the company. Additionally, Stephens initiated coverage with an Equal Weight rating and a price target of $205, citing Palo Alto’s strong market position and potential in cloud security growth.

These recent developments reflect Palo Alto Networks’ strategic efforts to expand its capabilities and maintain its leadership in the cybersecurity industry.

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