Jefferies’ Top Crowded Software Long Positions: Top 10 Stocks

8. Palo Alto Networks, Inc. (NASDAQ:PANW)

Number of Hedge Fund Holders In Q2 2024: 66

Shares Short % Of Outstanding: 2.95%

Palo Alto Networks, Inc. (NASDAQ:PANW) is a pure-play cybersecurity company that offers a host of products such as malware protection, cloud network and platform security, and firewalls. It has been one of the most interesting software stocks in 2024 courtesy of a massive 28% share price drop in February. This was its worst fall in history, and it came on the back of a full-year billings cut by the firm. Billings growth is a key metric of software stock evaluation since it relates to growth, and Palo Alto Networks, Inc. (NASDAQ:PANW) reduced its midpoint billings and revenue guidance to $10.15 billion and $7.975 billion, respectively. Previously, the two respective figures were $10.75 billion and $8.175 billion. When compared to the levels immediately before the crash, Palo Alto Networks, Inc. (NASDAQ:PANW)’s shares have gained a meager 3.7% so far. On a longer-term basis, the firm has been working to expand its presence in the important edge security industry that regulates employees using personal devices to access business networks. Palo Alto Networks, Inc. (NASDAQ:PANW)’s next-generation security business dominated by its Cortex platform has been a hot performer in 2024 with annual recurring revenue growing by 42.8% in its fiscal fourth quarter.

Parnassus Investments mentioned Palo Alto Networks, Inc. (NASDAQ:PANW) in its Q2 2024 investor letter. Here is what the fund said:

“Palo Alto Networks has been a profitable position for the portfolio. Given its elevated valuation, we decided to sell it to fund the purchase of Workday, where we see greater opportunity and a clearer story of margin expansion potential.”