Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Thematic (Sector/Industry)

<ul>
<li>Asia's cybersecurity companies will benefit from escalating AI fear-mongering and actual security breaches that are increasing in number and sophistication.  US cybersecurity firms have rallied since the Mythos breach.</li>
<li>
<a href="https://www.smartkarma.com/entities/trend-micro-inc" target="_blank" data-smartkarma-citation="entities:13172:1" rel="noopener">Trend Micro Inc (4704 JP)</a> and <a href="https://www.smartkarma.com/entities/digital-arts-inc" target="_blank" data-smartkarma-citation="entities:2846:1" rel="noopener">Digital Arts (2326 JP)</a> have returns above WACC, while <a href="https://www.smartkarma.com/entities/ahnlab-inc" target="_blank" data-smartkarma-citation="entities:19824:1" rel="noopener">Ahnlab Inc (053800 KS)</a> and <a href="https://www.smartkarma.com/entities/systex-corp" target="_blank" data-smartkarma-citation="entities:19814:1" rel="noopener">Systex Corp (6214 TT) shares have recently advanced.</a>
</li>
<li>Since 2023, China has implemented AI safety measures, progressively shifting from controlling content and labor market impacts to ensuring reliability, preventing loss of model control, and ensuring human autonomy.  </li>
</ul>


Asia's cybersecurity companies will benefit from escalating AI fear-mongering and actual security breaches that are increasing in number and sophistication.  US cybersecurity firms have rallied since the Mythos breach.

Trend Micro Inc (4704 JP) and Digital Arts (2326 JP) have returns above WACC, while Ahnlab Inc (053800 KS) and Systex Corp (6214 TT) shares have recently advanced.

Since 2023, China has implemented AI safety measures, progressively shifting from controlling content and labor market impacts to ensuring reliability, preventing loss of model control, and ensuring human autonomy.  


ASIA CYBERSECURITY PLAYS: How to Make Money Before the Apocalypse !!

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Palo Alto Networks reported its fiscal third quarter 2026 results, highlighting a record performance that surpassed guided expectations across key metrics.</li><li>The company delivered $8.13 billion in next-generation security (NGS) annual recurring revenue (ARR), reflecting a 60% year-over-year increase, driven by strong organic bookings growth and contributions from recent acquisitions including CyberArk and Chronosphere.</li><li>Excluding acquisition impacts, organic NGS ARR rose 28%, accompanied by a 22% growth in remaining performance obligation (RPO) adjusted for acquisitions.</li></ul>

Palo Alto Networks reported its fiscal third quarter 2026 results, highlighting a record performance that surpassed guided expectations across key metrics.The company delivered $8.13 billion in next-generation security (NGS) annual recurring revenue (ARR), reflecting a 60% year-over-year increase, driven by strong organic bookings growth and contributions from recent acquisitions including CyberArk and Chronosphere.Excluding acquisition impacts, organic NGS ARR rose 28%, accompanied by a 22% growth in remaining performance obligation (RPO) adjusted for acquisitions.

Palo Alto Networks’ Firewall Comeback: Can 40% Booking Growth Extend The Runway?

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Palo Alto Networks (PANW) announced 3QFY26 (year-end Jul) results: revenue rose 31% YoY to US$3.0bn (or 14% YoY excluding the consolidation impact of CyberArk and Chronosphere), 2.0% ahead of Bloomberg consensus; nonGAAP net income reached US$684mn, up 22% YoY and 5% above consensus.</li><li>AI-driven demand is extending PANW's growth runway, in our view, as evidenced by early-stage results: 1) over US$200mn ARR from a leading frontier AI lab that relies on PANW for observability across training and inference; and 2) over 300 Prisma AIRS customers in 3QFY26 (up from ~30/&gt;100 in 1Q/2QFY26).</li><li>Meanwhile, PANW's ~40% YoY growth in SASE (Secure Access Service Edge) ARR in 3QFY26 (accelerated from 36% in 3QFY25)—propelled by customers prioritizing unified protection across hybrid workforces and AI applications—was more than 2x average market growth, demonstrating PANW's strong market positioning. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Palo Alto Networks (PANW) announced 3QFY26 (year-end Jul) results: revenue rose 31% YoY to US$3.0bn (or 14% YoY excluding the consolidation impact of CyberArk and Chronosphere), 2.0% ahead of Bloomberg consensus; nonGAAP net income reached US$684mn, up 22% YoY and 5% above consensus.AI-driven demand is extending PANW's growth runway, in our view, as evidenced by early-stage results: 1) over US$200mn ARR from a leading frontier AI lab that relies on PANW for observability across training and inference; and 2) over 300 Prisma AIRS customers in 3QFY26 (up from ~30/&gt;100 in 1Q/2QFY26).Meanwhile, PANW's ~40% YoY growth in SASE (Secure Access Service Edge) ARR in 3QFY26 (accelerated from 36% in 3QFY25)—propelled by customers prioritizing unified protection across hybrid workforces and AI applications—was more than 2x average market growth, demonstrating PANW's strong market positioning. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Palo Alto Networks (PANW US) - AI-Driven Demand Extends Growth Runway

<ul><li>Palo Alto Networks has moved deeper into AI security with its planned acquisition of Portkey, an AI gateway provider designed to manage and secure autonomous agent traffic across enterprise systems.</li><li>The transaction, expected to close in fiscal Q4 2026 subject to customary conditions, comes shortly after Palo Alto highlighted rapid adoption of Prisma AIRS, its AI security platform, which crossed 100 customers in Q2 FY2026 and built a nine-figure pipeline.</li><li>Portkey processes trillions of tokens per month with low latency and acts as a centralized control plane for AI workloads, giving enterprises visibility, routing, governance, and runtime security over AI transactions.</li></ul>

Palo Alto Networks has moved deeper into AI security with its planned acquisition of Portkey, an AI gateway provider designed to manage and secure autonomous agent traffic across enterprise systems.The transaction, expected to close in fiscal Q4 2026 subject to customary conditions, comes shortly after Palo Alto highlighted rapid adoption of Prisma AIRS, its AI security platform, which crossed 100 customers in Q2 FY2026 and built a nine-figure pipeline.Portkey processes trillions of tokens per month with low latency and acts as a centralized control plane for AI workloads, giving enterprises visibility, routing, governance, and runtime security over AI transactions.

Palo Alto Networks' Portkey Deal Targets The Agentic AI Attack Surface Prisma AIRS Was Missing!

<ul><li>Palo Alto Networks entered late March under pressure from two overlapping narratives: a broader software selloff and a fresh wave of anxiety that new AI models could reshape cybersecurity faster than incumbents can adapt.</li><li>That backdrop had already pushed the stock down roughly 15% in 2026 before another downdraft hit after concerns tied to Anthropic’s latest model spilled across the sector.</li><li>Then came a move that immediately changed the tone.</li></ul>

Palo Alto Networks entered late March under pressure from two overlapping narratives: a broader software selloff and a fresh wave of anxiety that new AI models could reshape cybersecurity faster than incumbents can adapt.That backdrop had already pushed the stock down roughly 15% in 2026 before another downdraft hit after concerns tied to Anthropic’s latest model spilled across the sector.Then came a move that immediately changed the tone.

Palo Alto’s AI Panic Selloff Just Met Its Biggest Opponent—The CEO Himself!

United States

Palo Alto Networks, Inc. provides network security solutions. The Company offers firewalls that identify and control applications, scan content to stop threats, prevent data leakage, integrated application, user, and content visibility. Palo Alto Networks serves customers worldwide.

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Palo Alto Networks (PANW US)

ASIA CYBERSECURITY PLAYS: How to Make Money Before the Apocalypse !!

Asia's cybersecurity companies will benefit from escalating AI fear-mongering and actual security breaches. US cybersecurity firms have rallied...

David Mudd

Palo Alto Networks’ Firewall Comeback: Can 40% Booking Growth Extend The Runway?

Palo Alto Networks reported its fiscal third quarter 2026 results, highlighting a record performance that surpassed guided expectations across key...

Baptista Research