Key Stats for Palo Alto Networks Stock
- Price change for Palo Alto Networks stock in Last 6 Months: 79%
- $PANW Stock Price as of Jul. 9: $338
- 52-Week High: $368
- $PANW Stock Price Target: $324
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What Happened?
Palo Alto Networks (PANW) CEO Nikesh Arora is pushing back against the idea that AI is already cheap enough for businesses to adopt widely. Speaking on CNBC’s “Squawk on the Street” Thursday, Arora said token costs need to come down as much as 90% before AI can see truly large-scale adoption.
His comments came right after OpenAI CEO Sam Altman told CNBC that OpenAI’s newest model is 54% more token-efficient for agentic coding tasks.
Arora’s response was measured but pointed: “I think 54% is a good start. I think we probably need another turn at it.”
In his view, token efficiency needs to improve by another 20% over the next 12 months, then keep climbing toward that 90% reduction target within two years.
Why does this matter so much to Arora?
- Rising token costs have become a real pain point for businesses trying to build AI budgets.
- As those costs climb, it gets harder for companies to justify rolling out AI tools at scale.
- “We need to see the pricing for AI come down,” he said plainly.
Arora isn’t alone in raising this concern. Palantir CEO Alex Karp made similar comments last week, criticizing the token pricing model used by companies like Anthropic and OpenAI.
Karp went so far as to suggest open-weight models could be a better path forward, saying enterprises are essentially wasting time and money navigating the current token system.
That pricing pressure is already pushing some businesses toward cheaper open-weight alternatives, including Chinese models that are rapidly catching up to their American competitors.
Meanwhile, AI infrastructure spending continues to climb to new records. Companies are getting creative about how they fund it too.
SpaceX raised $25 billion through a bond sale last month, and Amazon raised another $25 billion in debt just this week to help cover AI-related investments.
Despite his concerns about pricing, Arora sounded confident that things will eventually balance out. “It’s important to understand the demand continues to be infinite, and as long as you have an infinite demand curve that you’re facing, I think all these things will rationalize over time,” he said.
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What the Market Is Telling Us About Palo Alto Networks Stock
Arora’s comments come at an interesting moment for Palo Alto Networks stock. The company just wrapped up a record Q3, with next-generation security ARR growing 60% year-over-year to $8.13 billion, driven heavily by rising demand to secure AI systems and agentic workloads.
As AI tools spread across more companies, cybersecurity needs tend to grow right alongside them, which has been a major tailwind for Palo Alto Networks stock lately.
That connection matters here. If token costs do come down as Arora expects, wider AI adoption could create even more entry points for cyberattacks and greater demand for the kind of security Palo Alto Networks sells.
Arora’s public comments on AI economics aren’t just industry commentary. They tie directly into how he sees the opportunity ahead for Palo Alto Networks stock as businesses figure out how to deploy AI safely and affordably.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!