Nikesh Arora, the CEO of Palo Alto Networks, thinks Wall Street is totally wrong about artificial intelligence. As the tech market continues to freak out about AI replacing traditional software, Arora is telling everyone to calm down, especially when it comes to cybersecurity.
“I’m still confused why the market is treating AI as a threat to at least cybersecurity,” he said on an earnings call this week. He argued that the rise of AI actually makes powerful security tools even more essential.
Arora’s comments come as the entire software industry is getting hammered by what some are calling the “SaaSpocalypse.” In recent weeks, investors have been dumping software stocks out of fear that new AI tools from companies like Anthropic and OpenAI will eventually make their products obsolete. This sell-off has hit even the biggest names, with the main software ETF down over 23% this year. Palo Alto Networks has not been immune; its own stock has dropped 11% in 2026.
But Arora believes this panic is misguided. Instead of replacing security software, he says AI is becoming an essential part of it. “It’s not a secret,” he said. “Almost every security product has some version of a copilot that now runs in tandem with the product.”
Palo Alto Networks is betting big on this vision. The company has been on a spending spree, buying up other security and AI firms to bolster its offerings. This includes a massive $25 billion acquisition of CyberArk and a new deal to buy the Israeli startup Koi.
Even though the company’s stock took a hit after it gave a weaker-than-expected forecast, Arora is confident that his AI-focused strategy will pay off. “We believe we’re now entering the next phase of AI adoption,” he told analysts. In his view, the AI revolution won’t kill the cybersecurity industry—it will supercharge it.
