Stock Slide In Palo Alto Is a Buying Opportunity: Portfolio Manager

(CTN News) – Advisors Capital’s JoAnne Palo Alto Feeney outlines what she calls “the three buckets” for investors when assessing AI opportunities: chips that enable AI infrastructure, server manufacturers that build that infrastructure, and software developers that utilize Palo Alto AI.

Despite headwinds in certain areas, such as the chip slowdown, Feeney claims firms offering consumer use-cases such as Amazon (AMZN), Microsoft (MSFT) and others have a long runway.

Those companies will be well positioned as generative AI continues to grow, as more “consumer-facing” AI applications emerge.

Feeney cites Palo Alto Networks (PANW) as an example of a company that is enhancing cybersecurity capabilities for businesses through the use of artificial intelligence. However, she describes the strategic change as being very smart, despite recent guidance questions.

In Feeney’s view, investors should look beyond short-term stock pressure and take advantage of any weakness to build positions in durable AI companies such as Palo Alto Networks.

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In terms of some of the massive run-up that we have seen, there is going to be a life after NVIDIA that we will have to consider as well. It is critical to note that there are a number of pillars of generative Palo Alto AI. These are the applications built upon the language learning models, and those models built upon the chips that power the data centers.

What is the next portfolio pivot, perhaps, that is still within generative AI, but moving towards consumer acceptance of some of these solutions?

JOANNE FEENEY: I agree. That’s right. So you have broken it down very nicely into three categories. In the first place, you have the chips that enable you to build the Palo Alto servers that run the AI training and inference models.

Then you have the individuals responsible for building the servers and making them available to, not just consumers through ChatGPTs, but also to other software companies that are developing novel ways to use AI.

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