Palo Alto Networks gains on S&P 500 inclusion; New top pick at Wolfe

Palo Alto Networks (NASDAQ:PANW) shares trade over 4% higher on Monday after S&P Dow Jones Indices announced the cybersecurity stock will replace DISH Network Corp. (NASDAQ:DISH) in the S&P 500.

The new changes will be effective prior to the market open of trading on Tuesday, June 20.

Wolfe Research analysts hiked the price target on PANW to $255 per share from the prior $225 as the S&P 500 inclusion will benefit the stock sentiment.

Moreover, the PANW stock is now included in the “Wolfe Alpha List.”

“64% of respondents in our RSA Conference floor survey in 2023 indicated that their security strategy is either already platform-based or is moving in that direction. In our view, PANW is the best positioned pure play security vendor to benefit from this platform dynamic, and we are adding the name to our Wolfe Alpha List as our top pick in Security,” they said in a client note.

Moreover, the analysts argued that PANW could benefit from the ongoing AI hype because of “the sheer amount of relevant security data being generated today across its broader security offerings.”

“Additionally, we expect that the platform play itself becomes increasingly more important given that “security co-pilots” will likely require multiple security solutions to take relevant actions at the request of or on behalf of security analysts,” they concluded.