Shares in Palo Alto Networks Inc (NASDAQ:PANW) are bouncing back this week following a steep drop last week after it reported weaker-than-expected earnings guidance.
The shares fell 28% after CEO Nikesh Arora noted in a conference call following the results, that clients were beginning to show signs of “spending fatigue” — even as online cybersecurity threats increased.
Shares in Palo Alto’s sector rivals fell in sympathy, with CrowdStrike Holdings Inc (NASDAQ:CRWD) down around 10% on the day and Zscaler Inc (NASDAQ:ZS) falling nearly 15%.
Of course, customers are getting spending fatigue. Cybersecurity costs rise in tandem with the growing risk of attack and complexity of threat. It’s simply one rising annual cost chief technology officers will have to get used to.
Pricing should remain competitive as more players enter what is currently not regarded as an overcrowded market.
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