New York, February 17, 2026, 13:58 (EST) — Regular session
- Shares fell about 1.5% in afternoon trade as Palo Alto Networks announced a deal for startup Koi.
- The company also rolled out a new managed security service tied to its Unit 42 and Cortex XSIAM platform.
- Investors are braced for quarterly results after the close, with guidance and deal integration in focus.
Palo Alto Networks (PANW.O) shares were down about 1.5% at $164.50 in afternoon trade on Tuesday after the cybersecurity firm announced plans to acquire startup Koi, with investors also looking ahead to earnings due after the bell. The stock touched an intraday low of $160.11 earlier in the session.
The move came with pressure building again across high-growth software, after last week’s tech-led slide rattled sentiment. Investors have been weighing how fast-moving AI shifts pricing power and spending in the sector. (MarketWatch)
For Palo Alto, it’s a messy kind of headline day: deal news, product news, and a quarterly report that can reset expectations all at once. Traders are watching whether the company’s push into newer AI security tools translates into steadier demand, or just louder marketing.
Palo Alto said it signed a definitive agreement to buy Koi, pitching the deal as a way to secure “agentic” AI tools on laptops and other endpoints — software that can act with broad permissions and, the company argues, slip past older controls. Chief Product & Technology Officer Lee Klarich called AI agents “the ultimate insiders,” while Koi CEO Amit Assaraf said “traditional solutions are blind.” Palo Alto said it would give more detail on its earnings call later Tuesday. (Palo Alto Networks)
Earlier, the company also announced Unit 42 Managed XSIAM 2.0, a managed security operations center service — a “SOC” is the team that monitors and responds to cyber alerts — built on its Cortex XSIAM platform. It includes what the company called a 250-hour “Breach Response Guarantee” and support for third-party endpoint detection and response tools, or EDR, which watch devices for suspicious activity. “Security is measured in outcomes, not alerts,” Next Generation Security President Karim Temsamani said. (Stock Titan)
Craig Robinson, research vice president for security services at IDC, said companies need managed security services that “combine AI-driven automation with human expertise” as attacks speed up and security teams stay stretched. (Streetinsider)
The stock’s slide was not isolated. CrowdStrike was down about 4.1%, Fortinet fell about 4.5% and Zscaler dropped roughly 3.4% in afternoon trade.
Analysts have been bracing for a noisy set of numbers given Palo Alto’s recent deal activity. FactSet estimates cited by MarketWatch call for about 93 cents in adjusted profit per share on roughly $2.58 billion in revenue for the quarter, and the stock is down about 9% year-to-date, the report noted. (MarketWatch)
The debate into the print is less about the quarter and more about what comes next — subscription momentum, and whether management can keep guidance readable while it folds in new assets. Watch the company’s commentary on annual recurring revenue, a proxy for contracted subscription sales, and any shifts in sales cycles.
But the risk is execution. New deals can take longer to close, draw scrutiny, or simply distract, and a shaky software tape has punished even small stumbles in outlook. If customers push out purchases, or if discounting shows up again, the stock’s downside can reopen fast.
The next catalyst lands after the closing bell, when Palo Alto reports results and investors press for details on integrating recent acquisitions and the timetable for Koi. (Investopedia)
