Post-holiday light Tuesday: Palo Alto Networks beat (revenue +15%, EPS +27%) but sold off -7% on Q3 EPS guide miss ($0.78-0.80 vs $0.92) from $25B CyberArk integration costs. Platformization accelerating (RPO +23%, 70K customers) but near-term margin pressure—M&A execution risk dominates sentiment
"Picks and shovels" AI thesis validated: ADI's ATE monopoly (70-80% share) + data center infrastructure (power/optical) = durable $2B+ run-rate with 75-80% gross margins. 22nd consecutive dividend increase (+11%), fortress balance sheet (0.8x leverage), 45%→47-48% operating margin trajectory
Analog Devices crushed Q1 (revenue $3.16B +30% YoY, EPS $2.46 +51% beat $2.33) with AI businesses (~20% revenue) accelerating—ATE +40%, data center +50%. Margins expanding (71.2% gross +240bps, 45.5% operating +500bps). Q2 guide $3.5B new ADI record. "Banner year" potential.
PANW executing bold strategy ($25B CyberArk + $3B Chronosphere) to dominate identity/cloud/network/AI full-stack, platformization resonating (subscription +14%, software 45% products), but Q3 EPS guide -13% miss shows integration costs real—2-4 quarter headwind
TORONTO — Canadian and U.S. stock markets moved in opposite directions Tuesday, as basic materials stocks weighed on the S&P/TSX composite index. Read Full Article →
