Why Palo Alto Networks Stock Popped Today
Key Points
Last week, rumors of a Claude Mythos cybersecurity AI spooked investors.
Today, Bernstein says there's nothing to worry about.
You still might want to worry about Palo Alto's stock price though.
- 10 stocks we like better than Palo Alto Networks ›
Palo Alto Networks (NASDAQ: PANW) 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%.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
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.
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.
Should you buy stock in Palo Alto Networks right now?
Before you buy stock in Palo Alto Networks, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palo Alto Networks wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $503,861!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,026,987!*
Now, it’s worth noting Stock Advisor’s total average return is 884% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of March 30, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.
Recommended Articles
