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Luke Kawa

Palo Alto Networks surges after posting better sales, earnings, and guidance than Wall Street anticipated

Palo Alto Networks is soaring after posting top- and bottom-line beats in the fourth quarter along with a bright outlook for its current fiscal year.

For the three months ended July 31, the seller of AI-enabled cybersecurity offerings generated revenues of $2.54 billion (ahead of estimates for $2.5 billion) with adjusted earnings per share of $0.95, 6 cents above Wall Street’s call.

Palo Alto Networks is basking in sell-side love after these results. Bank of America upgraded the shares to “buy,” while Truist hiked its price target to $220 from $205 and Rosenblatt upped its price target to $225 from $215.

Shares were up 6.6% in premarket trading.

The company provided Q1 and full-year 2026 guidance for sales that were modestly ahead of expectations, while the adjusted EPS outlook for both those periods more meaningfully exceeded what analysts had projected. This guidance does not include any impacts from its recently announced acquisition of CyberArk, which CEO Nikesh Arora touted as a way to offer “the most complete integrated security solution in the market” during a conference call with analysts.

“We continue to view this deal as a strategic home run by PANW as it continues its hunt to build an all-in-one solution for enterprises by adding a golden asset in CYBR who is the premier player in identity/privileged access management security,” wrote Wedbush Securities analyst Dan Ives, who included the stock in his “AI 30” list of favorites and has a $225 price target. “Cybersecurity is a clear 2nd/3rd derivative play in the AI Revolution leading to PANW ultimately emerging in the driver’s seat to gain market/mind share with last night’s strong quarter and outlook a key step forward for Nikesh & Co.”

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Luke Kawa

GE Vernova jumps after company secures first wind repower upgrade contract outside the US with Taiwan Power

GE Vernova is soaring as its onshore wind repower business goes international.

The company signed a deal to supply 25 repower upgrade kits to Taiwan Power Company, which will modernize its existing fleet to extend its lifespan, along with a five-year operations and maintenance services agreement.

“The milestone international contract builds on GE Vernova’s track record of repowering over 6,000 wind turbines in the United States, extending that expertise to support Taiwan’s decarbonization goals,” per the press release.

GE Vernova boasts 57,000 turbines installed worldwide. Turning past customers into a recurring revenue stream via these upgrade contracts is certainly a tidy piece of higher-margin business for the firm.

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Luke Kawa

A potential Netflix purchase of Warner Bros. streaming and studio assets is causing headaches for investors, per Morgan Stanley

On the surface, it’s easy to see why Netflix would be interested in bidding for Warner Bros. Discovery’s studio and streaming assets: the opportunity to add iconic franchises like DC Comics, “Harry Potter,” and “The Lord of the Rings,” as well as legions of HBO original shows that have stood the test of time.

However, the introduction of all this content, much of which has traditionally generated revenue in ways that Netflix does not, might be adding too many tentacles for even the creator of “Squid Games” to effectively manage, per Morgan Stanley, which also notes that it’s questionable if regulators would agree to such a tie-up.

“While Netflix is the largest of the reported bidders by a factor, it may have the smallest synergy opportunity and perhaps the toughest regulatory path,” analyst Benjamin Swinburne wrote. “NFLX shares have been under pressure over concerns that a WB acquisition, if announced, would complicate the investment thesis, distract management, and/or dilute EPS.”

The other interested parties are Paramount Skydance and Comcast, per reports.

In short, a successful Netflix acquisition may see the streaming giant need to be able to raise prices and/or subscribers to make enough money from the acquired properties under its distribution umbrella as it veers away from how these assets have made bank, oftentimes through theaters and third-party distribution.

This introduces many “strategic questions,” as Swinburne wrote:

“If acquired, Netflix could choose to shift all theatrical distribution at Warner Bros. to direct release on Netflix, believing that it can generate more value by keeping these films exclusive to Netflix rather than monetizing in other windows — including theatrical. Over time, it could similarly exit the third-party licensing business and distribute all TV series produced by Warner Bros. studios on its own platform.

Such a transition would take time, as TV distribution is built on run-of-series agreements and multi-year licensing deals and talent relationships would likely require some in-production films to still see theatrical distribution. Long-term, however, this kind of business model pivot would put downward pressure on the earnings power of the acquired businesses, which would need to be recouped through faster growth at core Netflix to justify the acquisition price, if a deal were to be announced.

If Netflix were to announce a bid for WB, HBO could bring some similar strategic questions for Netflix. For example, Netflix could shut the service down and shift all content, both originals and licensed, onto Netflix. That would be walking away from nearly $2bn of adj. EBITDA, but Netflix may feel the content can be better monetized on core Netflix.”

Congressman Darrell Issa has written to the attorney general expressing antitrust concerns over the potential for Netflix to purchase Warner Bros. studio and streaming properties, writing that it “currently wields unequaled market power,” adding that these assets would “further enhance this position” to a level “traditionally viewed as presumptively problematic under antitrust law.”

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J. Edward Moreno

OpenAI launching Target app in ChatGPT

OpenAI has announced a partnership to integrate Target’s app into ChatGPT and enable a “curated, conversational shopping experience,” according to the press release. The sprinkle of AI fairy dust helped the retail giant to regain most of the losses it saw in premarket trading Wednesday after a disappointing earnings report earlier in the morning.

OpenAI previously announced similar partnerships with Walmart, Shopify, and Etsy.

But per a YouGov survey published this summer, Americans still have reservations about using AI to help them shop.

Target drops after trimming its profit outlook as demand softens

OpenAI previously announced similar partnerships with Walmart, Shopify, and Etsy.

But per a YouGov survey published this summer, Americans still have reservations about using AI to help them shop.

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Luke Kawa

Oklo surges after signing contract with Siemens Energy to accelerate progress of its advanced fission power plant

Oklo is soaring in early trading after the nuclear energy company signed a binding contract with Siemens Energy for steam turbine and generator systems to advance its nuclear power plant.

As part of the agreement, Siemens Energy will “begin engineering and design work to expedite procurement of long-lead components and initiate the manufacturing process for the power conversion system” for the Aurora powerhouse, a brand of advanced fission power plant under construction at the Idaho National Laboratory.

Building and getting power plants up and running is a necessary prerequisite for Oklo to shed its label as a “zero revenues” company as it aims to meet the growing need for power spurred by the AI boom.

Per the press release, “This contract with Siemens Energy for the power conversion system helps to de-risk supply chain and production timeline challenges and demonstrates concrete execution capability.”

Shares of Oklo lost nearly half their value from mid-October through mid-November as part of a broad downturn in speculative stocks.

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