Got $1,000? The 1 Cybersecurity Stock I'd Buy While AI Anxiety Is Hammering the Sector

By Chris Neiger – Mar 26, 2026 at 11:00AM ESTKey PointsPalo Alto more than tripled its AI platform customers in just one quarter. The cybersecurity specialist continues to expand its overall business.Management expects operating margins to be an impressive 29% this year.Cybersecurity is more necessary than ever as artificial intelligence security threats increase, but some investors have panicked lately, thinking that AI companies will take over the tasks that cybersecurity businesses currently handle.

Palo Alto Networks (PANW +2.90%), a leading security company, hasn't been spared, and its stock is down about 22% over the past six months. But I think some investors are getting the AI narrative about cybersecurity wrong. With threats on the rise, there may be a greater need for specialized cybersecurity companies that use AI to fight them, not less. As such, here's why picking up some of Palo Alto's shares right now could be a good idea. Image source: Getty Images. Why AI anxiety is likely overblown for cybersecurity stocks All tech companies face disruption from artificial intelligence, and investors should not assume any company is safe. But it's also a bad idea to immediately assume cybersecurity companies will be obsolete because of AI. Consider that OpenAI recently announced it's refocusing on its core AI product, which will be geared more toward workers and enterprise customers, rather than spreading its ChatGPT service across too many initiatives. The general idea is that even AI companies realize they need to focus on what they do well rather than trying to do everything. And it's why many software companies, including cybersecurity companies, will likely benefit from specialization in the AI age rather than being overtaken.

Palo Alto Networks CEO Nikesh Arora recently said, "Despite the current sentiment about AI and software, we firmly believe that security is [an] enabling layer that allows innovation to move forward safely and at scale." And the company is already seeing benefits from AI. Palo Alto's AI security service, Prisma AIRS, launched a few quarters ago, and management said it's already "rapidly scaling," with more than 100 customers using it at the end of the second quarter -- more than tripling in just one quarter. ExpandNASDAQ: PANWPalo Alto NetworksToday's Change(2.90%) $4.44Current Price$157.66Key Data PointsMarket Cap$125BDay's Range$152.14 - $159.3852wk Range$139.57 - $223.61Volume90KAvg Vol10MGross Margin73.50% Palo Alto's financial outlook looks strong In addition to the company's expanding AI products, its sales and revenue growth are already very healthy. Revenue increased by 15% to $2.6 billion in the most recent quarter, and diluted earnings per share jumped 61% to $0.61 per share. Palo Alto's management says revenue will rise 23% this year to $11.3 billion, and the company's high profitability is still intact, with management expecting non-GAAP (adjusted) operating margin to be about 29% for this year -- all at the top end of guidance. What's more, companies that use Palo Alto Networks are unlikely to make security changes in such an uncertain time. With the company boasting customers in all of the Fortune 100 companies and 75% of Global 2000 companies, switching costs to transition to a new security platform are high-risk for many companies. All of the above leave Palo Alto well positioned to benefit as demand for AI security increases. And with its shares taking a big dive recently, now could be a great time to buy the company's stock.Read NextMar 22, 2026 •By Dave KovaleskiIs Palo Alto Networks Stock a Buy Now?Mar 21, 2026 •By Jack DelaneyPalo Alto Networks Acquired 3 Companies in the Past Year. Here's Why Its Platformization Strategy Could Pay Off Big.Mar 20, 2026 •By Adam Levy3 Cybersecurity Stocks to Buy for the Age of Generative AIMar 16, 2026 •By Robert Izquierdo2 Top Cybersecurity Stocks to Buy in MarchMar 13, 2026 •By Leo SunCrowdStrike vs.

Palo Alto Networks: Which Cybersecurity Stock Will Win 2026?Mar 10, 2026 •By Bryan WhitePalo Alto Networks Just Made a $25 Billion Bet on 1 Security Platform. Is the Stock a Buy?About the AuthorChris Neiger has been a contributing Motley Fool technology and automotive analyst since 2012.

Before The Motley Fool, Chris was an automotive journalist for the BBC. He holds a master’s degree in journalism from Regent University and a bachelor’s degree from the University of Delaware.TMFNewsieStocks MentionedPalo Alto NetworksNASDAQ: PANW$157.59(+2.85%)+$4.37*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.