These days, interacting with the internet is a more or less essential part of life. Looking for a job, going shopping, watching your favorite show -- most of it is done online now. And that means your data is at more risk than ever.
Health-ISAC, a nonprofit focused on security in healthcare, reported a 55% surge in cyberattacks in 2025 for that one sector alone. And now with quantum computing around the corner, cybersecurity is an even more pressing issue. Quantum machines are theoretically capable of shredding just about any modern encryption.
While a quantum computer is likely out of reach for your run-of-the-mill hacker, the United States is far from the only country working on the technology or that has the capability to produce these machines.
Because of those and many other factors, cybersecurity has arisen as a colossal industry in its own right. And Palo Alto Networks (PANW +1.90%) is a very good way to capitalize on it.
Image source: Getty Images.
Quantum leap
Palo Alto is particularly focused on the quantum computing issue. To that end, it offers the industry's first security software enabled with anti-quantum measures.
While no quantum computer capable of breaking modern encryption yet exists to my knowledge, hackers know it's only a matter of time until that becomes possible. As such, they are doing something called "harvest now, decrypt later" (HNDL).They are stealing encrypted data they know is useless to them now and storing it until quantum computers can decrypt it. So, the company is big on preparing its customers for the threats posed by quantum computing before they materialize.
There is no such thing as an unhackable computer, given enough time and resources on the part of a hacker. But Palo Alto is preparing today's computers and networks to ensure they're hard enough targets that quantum-equipped hackers pass over them and hit a softer target unprepared for the digital equivalent of nuclear weapons.
NASDAQ: PANW
Key Data Points
The fact that Palo Alto is looking ahead to the security problems posed by quantum computing alone would make it worth a look.
But it also offers a whole cloud-enabled suite of security software to protect against both traditional cyberthreats, as well as modern artificial intelligence (AI) threats.
Its platforms have been adopted by nine of the Fortune 10 and eight of the 10 largest American banks, among others, by companies like Salesforce, Chipotle, and Dell.
And the company has the growth to show for its adoption by so many heavy hitters. For its most recently reported quarter (Q1 of its fiscal 2026, reported November 2025), the company generated $5.85 billion in annual recurring revenue (ARR), up 29% year over year. Total revenue for the quarter grew 16% to $2.47 billion.
Palo Alto also saw earnings per share (EPS) growth of 19% year over year and is running an operating margin of 30.2%.
The company also announced new AI partnerships with Nvidia and International Business Machines, the latter of which is a leader in quantum computing and will likely be a big help to Palo Alto in building out its defenses against quantum threats.
AI has already made cybersecurity more difficult, but at the very least, it can't crack modern encryption. Once quantum computing advances to the point that it can, cybersecurity will be a nightmare.
Palo Alto is already preparing for what's next, and it's worth a look if you'd like to do the same.
