Palo Alto Networks, Inc. (NASDAQ:PANW) heads into earnings, up more than 60% year-to-date, near all-time highs, but one investor believes the stock’s rally may be tied to a larger trend, not just cybersecurity.
According to Gabelli Funds portfolio manager John Belton, “a second ChatGPT-like moment” has unfolded this year as AI agents moved from research projects to real-world business tools generating tens of billions of dollars in annualized revenue.
That shift may be creating new winners beyond Nvidia Corp (NASDAQ:NVDA) and other AI infrastructure names.
From AI Demo To AI Business
Belton argues that the market’s enthusiasm for AI accelerated after the arrival of more capable models and agentic coding platforms such as Claude Code and OpenAI Codex.
The key difference is that AI agents are no longer viewed as futuristic concepts. They are increasingly being deployed across enterprises to automate software development, workflows and business processes.
As Belton put it, AI became “a revenue story, rather than just a research story.”
That transition has helped fuel a powerful rally across AI-linked stocks, from semiconductor makers to software companies.
Why Palo Alto Could Benefit
Unlike traditional software, AI agents are always-on, connected to multiple systems and capable of accessing large amounts of data. As organizations deploy more agents, they also create more identities, APIs and potential entry points for cyberattacks.
That dynamic is increasingly leading investors to view cybersecurity as a second-order AI trade.
Palo Alto Networks, with its broad platform spanning network, cloud and security operations, is positioned to benefit as enterprises look to secure expanding AI environments.
The Next Phase Of The AI Trade
For much of the past two years, the AI investment story centered on chips, servers and cloud infrastructure.
Now investors are beginning to ask a different question: who benefits after AI gets deployed?
Palo Alto’s rally suggests the market may already have an answer.
If a “second ChatGPT-like moment” is indeed underway, the next wave of AI winners may not just be the companies building AI. They could also be the companies protecting it.
Photo: PJ McDonnell via Shutterstock
