(This is the best stock on the market, brought to you by Josh Brown and Shawn Russo of Resortswells Management.) Josh – We're writing about two Cybersecurity Giants in our best stock column in recent weeks. If you're making money with those names, you'll be happy to hear that we have another article in the group. When Palo Alto Networks (PANW) appeared on the list last week, Sean was excited to get the chance to talk about it. Palo Alto is a 20-year-old company that was added to the S&P 500 in 2023. It is currently America's largest cybersecurity stock, with a market capitalization of $130 billion, just before the Cloud Strike. With Palo Alto, investors will win three businesses in one. Strata is a network security platform, and Prisma secures the cloud. And then there's Cortex, the AI and automation business that's currently on fire. Last week, CEO of Nikesh Arora, one of Silicon Valley's most respected executives, announced the integration of Prisma under the Cortex brand to highlight the importance of AI within the company. Speaking at the Bank of America Global Technology Conference on June 3, Alora reaffirmed Palo Alto's goals and doubled its operations over the next five years. This is a strong stock of a strong sector. Shawn will lay out the background for you and share some things about why this name works so well. Best Stock Spotlight: June 6, 2025 Sean – Palo Alto Networks Inc (PanW), where Tech is increasingly becoming the engine of this market, is on the list. Tariffs may control the headlines, but Tech holds the basis for that and continues to have the relative strength seen over the past decade. Through Factset, first quarter revenue reported on MAG 7 exceeded estimates by 14.9% compared to 8.2% of all S&P 500 companies. Mag 7's actual revenues increased 27.7% from the same period a year ago. Alphabet, Amazon and Nvidia were among the top five contributors of revenue growth for the S&P 500 in the first quarter. Within Mag 7, software-oriented names outweigh hardware/discretionary names. The top two performers YTD have risen by 20%, Microsoft has risen by 13%, while the bottom two performers have fallen by 19%, and Tesla has fallen by 18%. Within Tech, software is one of the best performance industries. iShares expands its popular software ETF Tech-Software Sector ETF (IGV), which has grown by 7% YTD and 33% over the past year. Looking at all software classification stocks within the S&P 500, 90% currently exceed the 50-day moving average, while 68% above the 200-day moving average. These stocks are 9% below the 52-week high, with a median relative strength index of 58 at 58. QQQ shows a slightly weaker width. QS is below 13% of the 52-week high, with a median RSI of 59. This shows that, while both groups show strength, the software stock within the S&P 500 exhibits slightly better technical positions compared to the wider technical index. Software is already a breeder of the high-performance high-tech sector. In our list, software constitutes the most populous industry with nine companies: ANSS, CDNS, CRWD, INTU, MSFT, PANW, PLTR, ROP and ZS. A big breakout? The bread was added to the list late last week. Palo Alto Networks is a platform-based cybersecurity company focusing on network security, cloud security, and general security operations with over 80K enterprise customers. This is the quarterly gross profit since Panw's launch. As of Panw's latest revenue report, the company reported an annual repeat revenue (ARR) of $5 billion from its next-generation security (NGS) offering. The company expects this momentum to continue, projecting an ARR of between $5.52 billion and $5.57 billion in the fourth quarter, representing growth of 31-32%. This powerful performance is driven by the demand for AI-powered security solutions, SASE, and software firewalls. The company also offers deep traction for large companies. 130 customers have generated ARRs of over $5 million, and 44 have generated over $10 million. The management strategy is to have 60-70% of ARRs come from these “platformed” clients to support long-term scalability and revenue durability. Management said this growth trajectory and customer engagement make Palo Alto confident in its path to its $15 billion target by fiscal year 2030. If you can reach the $200 range, you can join the elite software industry so far in 2025 and join Risk Management Josh. It went low after Panw reported revenue on May 20th, but buyers stepped up at a level of $182 to $185. They purchased it in 200 days, but it was not closed below. I keep it simple and take note below to tell you something has changed. As far as entries go, true technicians will wait for a breakout of over $200 and monitor a contentious volume before starting a position. The risk of predicting a breakout can fall below that level and end. Disclosure: (No) All opinions expressed by CNBC Pro contributors are opinions only and do not reflect the opinions of CNBC, NBC Universal, parent company or affiliates and may have been previously distributed on television, radio, the Internet, or other media. The above content is subject to our terms and conditions and privacy policy. This content is for informational purposes only and is not aware of any financial, investment, tax, legal advice or recommendations for purchasing security or other financial assets. Content is inherently general and does not reflect the unique personal circumstances of the individual. The above content may not be suitable for your particular situation. You should strongly consider seeking advice from your own financial or investment advisor before making any financial decisions. Investments include risk. The only examples of analysis included in this article are examples. The views and opinions expressed are those of the contributors and do not necessarily reflect the official policies or positions of Ritholtz Wealth Management, LLC. Josh Brown is CEO of Ritholtz Wealth Management and may maintain the security position of the discussed securities. Assumptions made within the analysis do not reflect the position of Ritholtz Wealth Management, LLC.
