Why Palo Alto Networks Stock Popped Today

Palo Alto Networks (PANW +6.69%) stock, which crashed 6% on Friday, worries over a new cybersecurity-capable version of an Anthropic artificial intelligence model, gained back nearly all its losses on Monday — after an analyst at Bernstein said there’s really nothing to worry about.

As of 10:15 a.m. ET, Palo Alto stock is up 5.9%.

Claude Mythos mayn’t be a myth, but it’s also not scary

If you recall, the thing that tripped up Palo Alto stock last week was a “draft blog” found on a “searchable database,” that claimed Anthropic’s new Claude Mythos AI model is “by far the most powerful AI model we’ve ever developed” — and particularly proficient with cybersecurity.

Investors took the hint, assumed this is bad news for cyber companies, and Palo Alto stock dropped — but not so fast, says Bernstein analyst Peter Weed.

Anthropic is not “getting into cybersecurity software,” says the analyst, nor will the arrival of Mythos remove the threat of hacking AIs that Weed says is driving Palo Alto’s business. In Weed’s opinion, Mythos is more about Anthropic shoring up its models to make them harder for hackers to use to create malware — not about replacing Palo Alto as a defense against malware.

Today’s Change

(6.69%) $9.83

Current Price

$156.85

Key Data Points

Market Cap

$120B

Day’s Range

$151.51 – $158.01

52wk Range

$139.57 – $223.61

Volume

165K

Avg Vol

10M

Gross Margin

73.50%

What it means for Palo Alto Networks

Weed argues investors have “vastly” overreacted to the threat from Mythos. But here’s the thing:

Even if Mythos isn’t the monstrous, market share-gobbling minotaur that investors made it out to be, there’s still plenty to be scared of in Palo Alto’s own stock price. Trading at 33 times free cash flow and more than 90 times trailing earnings — but expected to grow earnings no more than 13% annually over the next five years — Palo Alto stock looks priced beyond perfection to me.