Palo Alto's possible acquisition of CyberArk would bolster AI capabilities: analysts

Palo Alto Networks' (NASDAQ:PANW) potential acquisition of CyberArk (NASDAQ:CYBR) would complement Palo Alto's existing security stack and bolster its artificial intelligence capabilities, according to multiple analysts.

A report surfaced Tuesday that Palo Alto was in discussions to purchase the Israeli-based cybersecurity firm CyberArk for more than $20B. Although it is speculation at this point, analysts find the move would be positive for Palo Alto.

Last week, Palo Alto completed its acquisition of Protect AI, a company that provides security for AI applications and models. The analysts at Evercore ISI said an acquisition of CyberArk would complement it.

"Protect AI brings capabilities such as model scanning, posture management, generative AI runtime protection, AI agent security, and red teaming, addressing critical risks across the AI/ML lifecycle," said Evercore analysts, led by Peter Levine, in a Tuesday investor note. 

"CYBR governs who has access, while Protect AI monitors how that access is used, tracking model changes, detecting unauthorized modifications, and flagging potential vulnerabilities," Levine added. "Together, these capabilities could provide enterprises with an end-to-end solution for securing AI environments at scale."

Evercore also noted that data, AI security and cyber risk management remain top concerns for enterprises.

Jefferies also finds the combination of security measures provided by Palo Alto and CyberArk intriguing and timely.

"While there is no real overlap in the businesses today, both CYBR & PANW sell tolarge Enterprises making the potential cross-sell opportunity massive," Jefferies noted. "This acquisition would also supplement PANW's AI strategy giving it an advantage in both Machine & Agentic Identity security allowing PANW to offer end-to-end AI security for CISOs."