Palo Alto Networks, the most acquisitive cybersecurity firm, is in talks to acquire CyberArk Software for $20 billion, in what would mark its biggest deal to date under Chief Executive Nikesh Arora. Palo Alto stock fell on the news.
CyberArk is a leader in privileged access management. Its identity security platform spans over workforce and customer access, end point privilege security, secrets management, and identity management.
"While Palo Alto has been on the offensive with adding new capabilities through acquisitions, this would represent a game changing deal that would further bolster Palo Alto's platformization strategy by adding new capabilities," said Wedbush analyst Daniel Ives in a report.
Identity Security Growing Fast
He added: "This would be a key strategic poker move by the cyber stalwart with the expanding competitive landscape."
Hackers often aim to compromise networks by targeting insiders — employees or management with administrative access to company computer systems. As a result, more companies are shifting cybersecurity budgets to "identity and access management" tools that address insider threats.
Meanwhile, research firm IDC forecasts big growth in identity security. The Identity and Access Management market will double from $23.5 billion in 2024 to $47.1 billion in 2028, predicts IDC.
"This potential (Palo Alto/CyberArk) deal has significant merit, in our opinion, given it strengthens Palo Alto's position in artificial intelligence, augments its Zero Trust capabilities with a full stack of identity solutions and provides a meaningful cross-sell opportunity given the enterprise customer base overlap," said Jefferies analyst Joseph Gallo in a report.
Palo Alto Stock: Acquisition Spree
TD Cowen analyst Shaul Eyal also is upbeat on a deal.
"We believe investors are likely to view such a transaction positively as it makes strategic sense given the hybrid nature of the companies' platforms with high-enterprise focus," he said. "We see meaningful cross-sell opportunities given similar go-to-market channels and strategies."
Under Arora, who took the helm in June, 2018, Palo Alto has spent nearly $5 billion on some 20 acquisitions since 2018. Further, Arora remade the cybersecurity firm into a broad platform solutions provider via cloud computing services.
Palo Alto Networks' core market had been firewall network appliances that protect computer networks by blocking online intrusions and monitoring Web-based apps.
In early 2025, Palo Alto bought artificial intelligence cybersecurity startup ProtectAI.
On the stock market today, CyberArk stock jumped 13.5% to close at 434.48. Palo Alto stock fell 5.2% to close at 193.84.
Shares in SailPoint, a rival of CyberArk, rose 5.7% to 21.68.
In early July, Israeli news outlet Calcalist reported that Palo Alto and SentinelOne could be in advanced acquisition talks. SentinelOne stock fell 4.6% to 18.69 on Tuesday.
The cybersecurity market could be consolidating. Google-parent Alphabet in March agreed to buy Wiz in a $32 billion deal.
CyberArk Earnings Due Aug. 7
In 2025, Palo Alto has advanced 9% while CyberArk stock has jumped 28%.
Earnings for CyberArk stock are due Aug. 7.
CyberArk in 2024 acquired Venafi, targeting the market in Internet of Things — web-connected devices in factories, agriculture, telemedicine, retail stores, food services and other applications. Salt Lake City-based Venafi is a key player in so-called machine identity management.
Palo Alto stock holds an IBD Composite Rating of 95 out of 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
