We recently published a list of 15 Best Big Tech Stocks to Buy According to Analysts. In this article, we are going to take a look at where Palo Alto Networks, Inc. (NASDAQ:PANW) stands against other best big tech stocks to buy according to analysts.
Big Tech comprises some of the largest and most influential companies in the world, recognized for their sheer size, extensive customer base, and financial strength. Leading this group are five major companies that have been at the forefront of the tech sector economy, driving innovation and shaping consumer behavior. Over the years, Big Tech firms have benefited from the widespread adoption of smartphones and high-speed internet, increased demand for digital services, the rise of social media, strong demand for cloud computing, e-commerce, and digital advertising.
How Did the Big Tech Companies Become The Giants They are Today?
Beyond technological advancements, these companies have also benefited from several phenomena. The first is network effects—the more users a platform has, the more valuable it becomes. Other contributing factors include economies of scale as they expanded through acquisitions and the ease of scaling digital businesses globally; access to vast amounts of user data used to enhance products, target ads, and create highly personalized services; and their deep pockets (strong balance sheets) that enabled them to invest heavily in R&D, hire top talent, and operate during challenging times. This financial strength also allowed them to aggressively invest in AI and maintain a first-mover advantage. While challenges persist, we believe these companies will continue to innovate, expand their influence, and shape the future of technology.
In a recent interview with Yahoo Finance, Wedbush Securities’ Global Head of Technology Research, Dan Ives, expressed optimism about the future of Big Tech, stating:
“Microsoft’s $80 billion investment announcement and then Mark Zuckerberg’s announcement that his company plans to spend up to $65 billion on artificial intelligence is “the start of a massive build-out of AI Capex” that I think the Street is massively underestimating. And it’s the multiplier – every dollar spent on a NVIDIA chip, means $8 to $10 multiplier goes to the rest of tech – that’s bullish for tech. Of course, with Trump and Stargate, it just shows that fourth industrial revolution is just starting.”
While Big Tech typically refers to the top five mega-cap companies, we have prepared an extended list of 15 stocks that have made a significant impact on the tech landscape and are equally innovative and transformative as the top five.
Our Methodology
To list the 15 best Big Tech stocks to buy according to analysts, we screened companies with market capitalization of at least $100 billion and potential upside of at least 15%. Ultimately, the stocks were arranged in ascending order of their potential upside.
Note: All pricing data is as of market close on February 3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A cutting-edge computer lab full of IT experts monitoring the security of multiple systems.
Palo Alto Networks, Inc. (NASDAQ:PANW)
Upside potential: 130%
Number of hedge funds: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading cybersecurity company offering a comprehensive suite of security and zero-trust solutions designed to shield organizations from cyber threats. The company provides advanced firewalls, cloud-based security services, and endpoint protection, enabling businesses to secure their networks, applications, and data across various environments, including on-premises, cloud, and hybrid infrastructures.
With a strong emphasis on innovation, Palo Alto Networks, Inc. (NASDAQ:PANW) incorporates artificial intelligence, machine learning, and automation into its security offerings to enhance threat detection and response capabilities. Its market capitalization currently stands at approximately $121 billion, underscoring its significant position in the cybersecurity industry. Palo Alto Networks (NASDAQ:PANW) aims to capture a larger share of the cybersecurity market, which is projected to grow substantially in the coming years. According to a report published by Statista in June 2024, the estimated cost of cybercrime may reach $15.6 trillion by 2029, up from $9.2 trillion in 2024. Thus, the company is well-positioned to benefit from the rising demand for cybersecurity solutions, driven by the increasing frequency and sophistication of cyberattacks.
On January 21, 2025, an analyst from Morgan Stanley raised the price target for Palo Alto Networks, Inc. (NASDAQ:PANW) from $223 to $230 and maintained an Overweight rating. The analyst views the current valuation as a favourable entry point, given recent underperformance, and anticipates potentially larger deals and stronger market share gains for the company. The analyst also believes that the stock could double in 4-5 years, driven by platform deals and increased market share.
Overall, PANW ranks 1st on our list of best big tech stocks to buy according to analysts. While we acknowledge the potential of PANW to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PANW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
