With the rapid adoption of artificial intelligence (AI) by enterprises, the risks associated with unsecured AI models, such as data leaks or tampering, are becoming increasingly serious challenges. Palo Alto Networks (PANW) is doubling down on AI model security with the launch of Prisma AI-Ready Security (Prisma AIRS) in April 2025.
Prisma AIRS is integrated into Palo Alto Networks' Prisma Cloud platform, positioning AI model security as part of overall cloud protection rather than a separate, complex layer. This move is timely and strategic, given that traditional security tools often miss AI-specific threats. In the third quarter of fiscal 2025, management emphasized rising customer demand for securing AI deployments.
Prisma AIRS is designed to discover, test, and safeguard AI artifacts from build to deployment across hybrid and multi-cloud setups. The tool also extends Palo Alto Networks' existing capabilities in posture management and runtime security, and will add security for AI agents in the future. The pending acquisition of Protect AI is expected to further bolster Prisma AIRS' capabilities by integrating Protect AI's capabilities into the Prisma AIRS platform to provide comprehensive AI security across the entire AI development lifecycle.
Just weeks after launch, Prisma AIRS has already built an eight-figure sales pipeline. With AI infrastructure spending projected to exceed $300 billion in the next 12 months, Palo Alto Networks sees this as a key opportunity. Prisma AIRS, supported by the planned Protect AI integration, could become a foundational element of Palo Alto Networks' platform strategy and play a key role in helping the company meet its long-term target of $15 billion in annual recurring revenues by fiscal 2030.
Competitors like CrowdStrike (CRWD) and SentinelOne (S) are also gaining ground through platform expansion and AI innovation. CrowdStrike is positioning Charlotte AI as a key part of its competitive advantage in delivering automated and scalable cybersecurity. In the first quarter of fiscal 2026, CRWD expanded Charlotte AI's detection triage to enable autonomous expert-level triage, reasoning, and response at machine speed. SentinelOne posted year-over-year growth of 24% in its ARR, fueled by the rising adoption of its AI-first Singularity platform and Purple AI.
Shares of Palo Alto Networks have gained 11.8% year to date compared with the Security industry's growth of 20.3%. From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 12.86X, lower than the industry's average of 14.5X. The Zacks Consensus Estimate for PANW's fiscal 2025 and 2026 earnings implies year-over-year growth of 15.14% and 11.12%, respectively. The estimates for fiscal 2025 and 2026 have been revised upward in the past 60 days and 30 days, respectively.
In conclusion, Palo Alto Networks is well-positioned to capitalize on the growing demand for securing AI deployments with its Prisma AIRS platform. The pending acquisition of Protect AI is expected to further strengthen its offerings in this space. Meanwhile, competitors like CrowdStrike and SentinelOne are also making strides in AI-driven cybersecurity solutions. Investors should keep an eye on these developments as they continue to shape the cybersecurity landscape.
