Bank of America raised its price objectives for four leading cybersecurity firms—Cloudflare, Palo Alto Networks, SentinelOne and CrowdStrike—citing expanding sector valuations, accelerating artificial‑intelligence adoption and a stronger long‑term growth outlook. The brokerage expects each company to sustain revenue growth of roughly 20% or more, noting that AI is increasing data volumes, expanding attack surfaces and making security systems more complex, which should support durable spending across the sector. Accordingly, analysts increased forward enterprise‑value‑to‑revenue and enterprise‑value‑to‑free‑cash‑flow multiples for the companies.
Cloudflare’s price objective was lifted to $330 from $255, reflecting a 33‑times fiscal‑2027 enterprise‑value‑to‑sales multiple, up from 25‑times previously, while its Buy rating was retained. The firm’s global network spans AI inference, application delivery, security and developer infrastructure, and momentum in its Workers, developer services and AI offerings underpins the premium valuation.
Palo Alto Networks remained a Buy, with its target raised to $420 from $330. The new valuation applies a 19‑times calendar‑2027 sales multiple, compared with 15‑times earlier. Platform consolidation is expected to benefit its network, cloud and security‑operations businesses, and expanding automation and AI capabilities could increase its share of enterprise security budgets.
SentinelOne’s Buy rating was reiterated, with its target moving to $22 from $20. Its Singularity platform offers autonomous threat detection and AI‑driven workflows; however, its smaller scale and lower margins justify a discount relative to larger competitors.
CrowdStrike’s target rose to $230 from $187.50, though the stock retained a Neutral rating. Leadership across endpoint, cloud, identity and security‑operations supports its growth prospects, but those strengths are already reflected in a premium valuation.
The revised targets rely partly on continued sector multiple expansion. BofA highlighted key risks including slower product adoption, weaker customer growth, rising competition and a broader decline in investor appetite for highly valued software companies.