Cyber security takedown

Palo Alto reported last night and their results are taking down the entire security sector with it… they announced an abrupt strategy shift that will negatively affect results for the next 12-18 months, but supposedly better for them in the long term.

Even though that is company specific news, all of cyber security has dropped significantly with them. As of now:

PANW -27%
CRWD -10%
ZS -15%
S -10%

That sector had done quite well (maybe too well) over the past few months, so they were ripe for a pullback, but this may be overdone, who knows.

The big dog (NVDA) is reporting tonight, how the market reacts to their numbers and commentary will determine the market direction for tech stocks in the short term.

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The key question from this PANW news is whether other cybersecurity vendors also have to give away freebies/steep price discounts to earn new business. Or whether this situation is PANW specific.

We will likely find out on 2/29 when ZS reports their Q4 earnings.

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Bloomberg had story today of shut down of huge Russian ransomware operation with 11,000 nodes. Same story? Bloomberg had paywall.