PANW at the Firewall: Break Out or Break Down?

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Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in PANW.

Palo Alto Networks, Inc. (Ticker: PANW) sits at the heart of a megatrend: cybersecurity must keep pace with cloud migrations, remote work, and increasingly sophisticated threats. With the stock trading near its highs and a quarterly earnings report on the horizon, traders are keen to see whether PANW remains a clear leader—or shows signs of crack.

PANW, best known for its Strata, Prisma, and Cortex security platforms, is trading near an all-time high after recently bouncing off its 50-day moving average.*

Below is a daily chart of PANW as of November 10, 2025.

Source: TradingView.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results.

PANW is expected to report fiscal first-quarter results on November 19, and the company has set a high bar with momentum in its new artificial intelligence (AI) offerings. In August, the company reported $2.5 billion in fiscal 2025 fourth-quarter revenue, up 16% from the year-ago period, The Motley Fool notes.

With a proposed $25 billion acquisition of CyberArk Software (a specialist in identity security) in the works, growing competition from cloud providers with built-in security, and the necessity of continuous innovation in a fast-moving space, traders must assess whether the stock is set for another leg higher—or facing a reset.

The Direxion Daily PANW Bull 2X Shares (Ticker: PALU) and Daily PANW Bear 1X Shares (Ticker: PALD) are potential tools for magnified or inverse exposure to PANW’s daily moves.

Here are some bullish and bearish catalysts that traders might want to watch over the next several weeks.

Why Bulls Like PANW

• Deal Potential: PANW’s proposed $25 billion acquisition of CyberArk Software would reinforce its identity-access management suite and deepen its platform moat.

• Big Market Tailwinds: Demand for cloud and network security is soaring as companies grapple with remote work, hybrid-cloud setups, and major breaches. PANW’s position as a “one-stop shop” for firewalls, cloud security, virtual firewalls, and identity tools gives it breadth. Citizens JMP recently raised its price target on PANW ahead of earnings, saying the CyberArk acquisition is part of the company’s “ambitious platform strategy and intelligent product expansion efforts to consolidate a wide swath of the total addressable cyber security market,” according to InsiderMonkey.

• Platform Strength and AI Innovation: Its major platforms (Strata, Prisma, Cortex) are gaining traction. Also, PANW recently unveiled new AI agents that help companies automate cybersecurity functions such as responding to email breaches, CNBC reports. At its Ignite event, PANW introduced security updates that target autonomous AI, the agentic workforce, and quantum readiness, according to NetworkWorld.

Traders leaning bullish might consider Direxion Daily PANW Bull 2X Shares (Ticker: PALU), which seeks daily investment results, before fees and expenses, of 200% of the performance of the common shares of Palo Alto Networks, Inc. (Ticker: PANW).

Bearish Catalysts for PANW

• Deal Risk and Dilution: There are two sides of the coin regarding the CyberArk buyout, which at $25 billion is historically large for PANW. Integration risk, execution drag, or dilution from financing could erode value.

• Competition and Commoditization: Cloud giants (AWS, Azure, Google Cloud) are increasingly offering their own native security tools. PANW must keep innovating or risk being a “bolt-on” vendor instead of category leader.

• Execution Pressure: Security threats evolve rapidly. One misstep in platform execution, or a big breach tied to its product, could hurt reputation and renewal rates. For example, recent threats targeted PANW firewalls among others, according to SecurityWeek.

Traders anticipating downside might consider Direxion Daily PANW Bear 1X Shares (Ticker: PALD), which seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite), of the performance of the common shares of Palo Alto Networks, Inc. (Ticker: PANW).

Single Stock Daily Leveraged & Inverse ETFs like PALU and PALD allow for precise positioning during earnings cycles, headline events, and market rotations—but are built for short-term trades only.

Get Ready to Trade PANW Earnings

When PANW reports earnings and hosts its analyst call, the market will watch:

• How the CyberArk acquisition is progressing (approval steps, timing, cost synergies)

• Growth in its AI and autonomous security agent business

• Renewal rates, expansion metrics, and any cloud-provider competitive comments

PANW represents a high conviction play on cybersecurity. But the setup carries execution benchmarks, acquisition risk, and strong competitive headwinds. For traders, the upcoming weeks offer movement in either direction.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with PANW and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with PANW and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to PANW is impacted by PANW’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to PANW at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to PANW increases on days when PANW is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with PANW and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to PANW is impacted by PANW’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to PANW at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to PANW increases on days when PANW is volatile near the close of the trading day.

Palo Alto Networks, Inc. Investing Risk – Issuer-specific attributes may cause an investment held by the Fund to be more volatile than the market generally. Palo Alto Networks, Inc. faces risks associated with: development of new products and services may be difficult; may be unable to attract new customers; reliance on channel partners; credit and liquidity risk of customers; sales to government entities may be subject to greater scrutiny; intense competition; among other risks.

Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production cost.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily PANW Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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