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Jim Cramer Says Palo Alto Networks, Inc. (PANW) CEO Nikesh Arora ‘Hates To Lose’ And Is ‘Extremely Competitive’

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6 days ago

November 9, 2024

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Jim Cramer Says Palo Alto Networks, Inc. (PANW) CEO Nikesh Arora ‘Hates To Lose’ And Is ‘Extremely Competitive’

We recently compiled a list of the Jim Cramer Says These 10 Stocks Can Do Well Regardless of Who Wins. In this article, we are going to take a look at where Palo Alto Networks, Inc. (NASDAQ:PANW) stands against the other stocks in Jim Cramer’s current watchlist.

Jim Cramer, the host of Mad Money, recently shared his thoughts on stocks that could perform well regardless of who ends up running the White House. On Tuesday, Cramer observed that the day’s market performance gave the impression that every stock could go higher no matter who secures the presidency.

He pointed to significant gains across various sectors, including aerospace, housing, retail, and healthcare. Cramer noted that this broad-based rally resulted in strong performances on Tuesday, with the Dow climbing 427 points, the S&P rising by 1.23%, and the NASDAQ soaring by 1.43%. However, he tempered his optimism by adding that days like Tuesday might prove to be outliers in the coming weeks.

Cramer took the opportunity to highlight ten stocks he believes will thrive and said:

“I want to highlight ten stocks that I believe will do well under either candidate, a who’s who of acclamation, companies that almost have to do well because of seismic trends and savvy managements. Companies that no White House would get hung up on, either because they’re beneath notice or they’re perceived as good corporate citizens by both sides. Stocks in industries that neither Trump nor Harris have ever targeted in the past.”

He also raised an important question for the viewers: “If you had the results of the election in hand, would you really know what to buy or sell?” According to Cramer, answering that question is far more complicated than it seems. He emphasized his list of stocks that can thrive regardless of the election outcome. These are companies that have no clear political adversaries in Washington, making them relatively safe bets. Cramer acknowledged, however, that many stocks that seem like obvious picks for one candidate or another often have hidden dynamics that don’t get enough attention.

“In the end, this presidential prognostication game is meaningless until we start hearing about cabinet appointments, those will tell us a lot. Then, we can figure out really who the winners and losers are. Right now, though, there are just too many political angles to every single stock story.”

Our Methodology

For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 5. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A cutting-edge computer lab full of IT experts monitoring the security of multiple systems.

Number of Hedge Fund Holders: 66

Cramer commented that Palo Alto Networks, Inc. (NASDAQ:PANW) is competitive with its peers and highlighted the rampant cyber crime that is occuring these days.

“Hey, speaking of hating to lose, the CEO of Palo Alto Networks, that’s Desh Aurora, and the CEO of CrowdStrike, that’s George Kurtz, are both extremely competitive. They know how to stop cybercrime better than anyone. I know it hurts our diversification efforts, but the Charitable Trust owns both these stocks because I’m a huge believer in cybersecurity and I’m not gonna be left behind by a great stock here. There’s so much crime happening online. These companies literally can’t handle all the business. Imagine that, I call that a high-quality problem.”

Palo Alto (NASDAQ:PANW) is one of the largest cybersecurity companies, offering a comprehensive range of security solutions. As cyber threats continue to escalate, it has positioned itself as a key player in the fight against cybercrime, a sector that, according to Cybersecurity Ventures, is expected to grow by 15% annually, reaching an annual cost of $10.5 trillion by 2025.

Nikesh Arora, the company’s chairman and CEO, highlighted in a recent appearance on Fortune’s Leadership Next podcast that the company covers approximately 80% of the cybersecurity landscape, a significant leap from the 10-15% share it had just six years ago. Arora also noted that cybersecurity, once a relatively overlooked area of technology, has now become a major focus for businesses as incidents like ransomware attacks have become increasingly frequent.

In fiscal 2024, Palo Alto (NASDAQ:PANW) generated $8 billion in total revenue, marking a 16% increase from the previous fiscal year. This growth reflects the ongoing demand for cybersecurity solutions, particularly in the area of next-generation security. The company’s annual recurring revenue from its platform-based customers surged by 43% in the final quarter of fiscal 2024, reaching $4.2 billion.

The company is optimistic about the future of its platform-based model. It expects that this revenue will more than triple to $15 billion by 2030, with a projected 3,500 of its top 5,000 customers expected to adopt this platform-based approach by then.

Overall PANW ranks 6th on Jim Cramer’s list of stocks that can do well regardless of who wins. While we acknowledge the potential of PANW as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PANW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.