Investing.com -- Berenberg this week initiated coverage of Palo Alto Networks (NASDAQ: PANW) with a Buy rating and a $215 price target, with analyst Rahul Chopra arguing that a broad sell-off in software stocks has created an attractive entry point into one of cybersecurity’s strongest franchises.

Chopra notes that the cybersecurity sector has been caught in the "AI eats software" narrative that has weighed on technology shares since late 2025, pushing Palo Alto’s valuation roughly 30% below its 2024-25 average multiple despite no meaningful deterioration in the company’s organic growth trajectory.

“We believe this de-rating is particularly overdone and view AI as an opportunity rather than a risk; platform vendors are likely to benefit disproportionately,” Chopra said in a Monday note.

As companies embed AI across their operations, the attack surface expands — more data, more cloud applications, more identities to secure. Furthermore, the rise of agentic AI “materially expands the TAM for cybersecurity vendors as AI agents need to be protected,” Chopra noted.

The analyst also said that cybersecurity platforms generate proprietary, real-time threat intelligence across large customer bases, a data moat that AI model providers cannot easily replicate.

At the heart of Berenberg’s bull case is Palo Alto’s "platformisation" strategy, under which it replaces multiple point security solutions with integrated products across network security, cloud, and security operations.

The brokerage estimates the company has completed 1,550 platformisations to date, up from 850 in mid-2024, with management targeting 2,500 to 3,500 by fiscal 2030.
Chopra believes consensus is underpricing this momentum, with the market implying only around 2,600 platformisations — toward the lower end of management’s range.

“We think consensus understates both the pace and the economics of the strategy, we estimate 6-14% upside to FY30E consensus revenues,” Chopra wrote.

The economics of platformised customers are compelling, he added. Palo Alto reports a net revenue retention rate of 119% for this cohort, with low single-digit gross churn.
Customers using all three platforms spend roughly $4.1 million per year, compared with $86,000 for those on a single platform.

Chopra also flagged the recently completed acquisitions of identity security firm CyberArk for $19 billion and observability platform Chronosphere for $3 billion as meaningful catalysts, expanding Palo Alto’s addressable market to an estimated $206 billion.

The $215 price target is based on a discounted cash flow model using a 9% weighted average cost of capital, implying a forward EV/sales multiple of 13x — broadly in line with where the stock traded through 2024 and 2025.

“We believe current multiples do not reflect the improving portfolio quality, the success of the platformisation strategy, and Palo Alto’s best-inclass “Rule-of-40” within the software peer group,” Chopra said.