The Zhitong Finance App learned that an American cybersecurity company$Palo Alto Networks (PANW.US)$After lowering the total revenue forecast for the current fiscal year (FY2024), US stocks once plummeted by nearly 21% in after-market trading, causing people to worry that the cybersecurity company's customers are controlling technology spending.

The company, which focuses on “AI+ cybersecurity,” predicted in a statement on Tuesday local time that the total revenue range for the 2024 fiscal year will be between US$7.95 billion and US$8 billion, up 15% to 16% year on year, while the company's previous total revenue cap was as high as US$8.2 billion, and analysts generally expected US$8.18 billion.

In terms of the latest results, the Santa Clara (Santa Clara), California-based cybersecurity company achieved a total revenue scale of 1.98 billion US dollars in the second quarter of fiscal year 2024 ending January 31, an increase of 19% over the previous year, slightly exceeding analysts' expectations of 1.97 billion US dollars. Product sales are clearly growing slower than service and support sales, underscoring the company's ongoing transformation. Excluding certain items, non-GAAP earnings per share were $1.46, which was higher than analysts' general expectations.

In terms of the Q3 earnings forecast for fiscal year 2024, the adjusted earnings per share range for Q3 was $1.24 to $1.26, analysts' general expectations were about $1.29 billion, the total revenue range for Q3 was US$1.95 billion to US$1.98 billion, and analysts' general expectations were around US$2.04 billion.

In addition, Palo Alto Networks also anticipates that the company's total contract order size for the 2024 fiscal year — an operating indicator that has received close attention — is expected to reach about US$10.2 billion (the latest forecast range is US$10.1 billion to US$10.2 billion); however, the company previously estimated that the total contract order limit was as high as US$10.8 billion.

Palo Alto Networks' performance prospects suggest that even if cyber attacks have surged in recent years, customers may lower their tech spending targets and recoup their consumer spending ambitions. Palo Alto Networks' total revenue growth forecast for the latest fiscal year was as high as 16%, far below the year-on-year growth rate of 25% or more in recent years.

Furthermore, the company did maintain earnings per share and free cash flow expectations for the full year of fiscal year 2024, as the company's chief financial officer, Dipak Golechha (Dipak Golechha), said that this reflected the company's “strict implementation of profit growth trends.” The company also said it aims to generate around $15 billion in revenue each year from what it calls “next-generation security” by fiscal year 2030.

Palo Alto Networks CEO Nikesh Arora (Nikesh Arora) said during the performance call that the company has been successfully implementing its profitable growth strategy. But he also said that some customers are facing “spending fatigue” when it comes to cybersecurity.

“This is one of our newly discovered phenomena,” he said. “Some customers seem to be implying that adding a few incremental products won't necessarily give them better security results.”

But CEO Alola also said that as the hacking situation intensifies, it is undeniable that some customers are demanding more and more from cybersecurity companies. “We are increasingly focused on working with companies that have already been affected by illegal attacks,” he emphasized at the performance conference. However, at the same time, he said that federal customer spending appeared to be somewhat weak, partly because one of the government projects previously planned by the company failed to be realized.

After Palo Alto, one of the “big AI stocks”, announced the latest performance expectations, the stock price plummeted after the market

Palo Alto Networks lowered its total revenue forecast for FY2024 and even ordered$CrowdStrike (CRWD.US)$und$Zscaler (ZS.US)$Other cybersecurity companies' stock prices were under intense selling pressure after the market, and all fell by more than 8% after the market.

Statistics show that after surging more than 110% in 2023, the stock price of Palo Alto Networks, one of the “biggest AI stocks” in the US, has risen by 24% so far this year, because investors hope that global companies' investment in cybersecurity will continue to soar, and that Palo Alto's valuation continues to rise in the global AI investment frenzy. Palo Alto, which is currently committed to integrating AI technology into the cybersecurity field, can be described as one of the biggest winners of the AI investment frenzy in the global stock market.

The strong performance of Palo Alto Networks stock prices in 2024 surpassed most popular tech stocks, such as Microsoft, Google, Amazon, AMD, and cybersecurity peers such as Crowdstrike.

“AI+ Cybersecurity” is expected to become Palo Alto Networks' new revenue engine

Alola, CEO of Palo Alto Networks, said during the performance conference that he sees the potential for performance growth brought about by artificial intelligence technology. He stressed that some customers are seeking the company's help to achieve “successful and responsible security deployment of artificial intelligence technology in their infrastructure.” Alola also said that as artificial intelligence becomes a key technology focused on by global enterprises, some customers are urgently seeking to protect the safety of deployment and development work related to artificial intelligence.

Palo Alto Networks has applied advanced technologies such as artificial intelligence (AI) and machine learning (ML) in cybersecurity to enhance the effectiveness of its security solutions. For example, incorporating AI technology can help Palo Alto analyze large amounts of threat intelligence data to discover patterns and correlations. This helps identify new threats and attack methods, and also enables the Palo Alto security system to quickly and automatically respond to threats, such as automatically blocking malicious IP addresses and isolating infected terminals.

Palo Alto Networks has launched an AI technology-driven platform called Cortex XSIAM, a cybersecurity service platform designed to revolutionize the way security organizations deploy data, analysis, and automation. Additionally, Palo Alto Networks plans to release a large-scale language model for cybersecurity within a year and integrate generative AI into its products and enterprise workflows. The company's CEO revealed that by integrating various forms of AI technology, including generative AI, cyber threat detection and prevention capabilities can be greatly improved, and said Palo Alto will try to deploy the latest artificial intelligence technology in every product.

Editor/Somer