New York, February 17, 2026, 13:58 (EST) — Regular session
- Palo Alto Networks shares slipped roughly 1.5% in afternoon trading after news broke of the company’s acquisition of startup Koi.
- Palo Alto Networks launched a managed security service connected to its Unit 42 and Cortex XSIAM platform this day.
- After the bell, investors are zeroed in on quarterly numbers—guidance and how deals are coming together are top of mind.
Palo Alto Networks (PANW.O) slipped roughly 1.5% to $164.50 during Tuesday’s afternoon session. The move followed word that the cybersecurity giant plans to acquire startup Koi. Shares earlier hit a low of $160.11. Investors are also bracing for earnings numbers expected after the bell.
Pressure is back on high-growth software stocks, following last week’s tech-driven tumble that shook confidence. Investors are still trying to gauge how AI’s swift impact could alter pricing power and budgets within the sector. 1
Palo Alto finds itself juggling several headlines today—deal chatter, fresh product updates, and a quarterly print, all landing together. The key question for traders: does the company’s bet on next-gen AI security offerings actually drive more reliable demand, or is it just another round of hype?
Palo Alto has struck a deal to acquire Koi, framing the move as a step toward locking down “agentic” AI tools that run on endpoints like laptops—software with sweeping access that, according to the company, can evade legacy defenses. “The ultimate insiders,” is how Chief Product & Technology Officer Lee Klarich described the new breed of AI agents. Koi CEO Amit Assaraf, for his part, said that “traditional solutions are blind.” Palo Alto plans to provide further details during its earnings call later Tuesday. 2
Earlier, the company rolled out Unit 42 Managed XSIAM 2.0, pitching it as a managed security operations center service built on its Cortex XSIAM platform. A SOC, or security operations center, handles cyber alerts and responses. The offering features what the company described as a 250-hour “Breach Response Guarantee” and brings in support for various third-party endpoint detection and response tools—EDR systems that monitor devices for unusual behavior. “Security is measured in outcomes, not alerts,” said Karim Temsamani, Next Generation Security President. 3
Craig Robinson, research VP for security services at IDC, points out that as attacks get faster and security teams remain under pressure, companies are looking for managed security services that blend “AI-driven automation with human expertise.” 4
The stock’s drop wasn’t happening in a vacuum. CrowdStrike slipped about 4.1%, while Fortinet lost roughly 4.5%. Zscaler was also down, off around 3.4% in afternoon trading.
With Palo Alto wrapping up several recent deals, analysts have been expecting a turbulent quarter. The latest FactSet consensus, as highlighted by MarketWatch, points to adjusted earnings of around 93 cents per share and revenue close to $2.58 billion. Shares have dropped about 9% year-to-date, according to the same report. 5
The focus heading into the print isn’t really on quarterly results, but rather what lies ahead — how subscriptions are tracking, and if management manages to keep guidance clear as it absorbs new assets. Pay attention to what the company says about annual recurring revenue (that’s the stand-in for contracted subscription sales), plus any changes to how deals are closing.
Execution remains the wild card here. Closing new deals often drags out, attracts attention, or pulls focus—none of which the market has much patience for, especially with software stocks already jumpy. Any sign of customers delaying buys or a return of discounting could hit the shares hard and quickly.
Palo Alto steps up after the bell with earnings. Investors are zeroed in on how it’s folding in the latest acquisitions and looking for any fresh clues about the schedule for Koi. 6
