PANW vs ZS: How Palo Alto Networks and Zscaler Compare (2026)
Short answer
PANW (Palo Alto Networks) and ZS (Zscaler) are often compared because they share investment themes, but they are different businesses. Palo Alto Networks is one of the largest pure-play cybersecurity companies in the world. Zscaler is a cloud-native cybersecurity company built around the zero trust security model. Neither is universally better: pick by which thesis you are expressing and what you already own. This is descriptive, not a recommendation.
What does Palo Alto Networks (PANW) do?
Palo Alto Networks is one of the largest pure-play cybersecurity companies in the world. It protects organizations across three broad areas. Network security centers on its next-generation firewalls (hardware, virtual, and cloud-delivered) plus the Prisma Access secure-access service edge (SASE) for protecting remote and hybrid workforces. Cloud security, branded Prisma Cloud, secures applications and workloads running across public clouds. Security operations, branded Cortex, uses AI and automation to detect and respond to threats across an enterprise. Palo Alto sells mostly through subscriptions and support, increasingly bundled under a platform strategy it calls platformization, where customers consolidate multiple security tools onto its integrated stack in exchange for better pricing and tighter integration. Founded in 2005 and headquartered in Santa Clara, California, Palo Alto has grown organically and through many acquisitions into a broad platform spanning network, cloud, and operations security, positioned as a consolidator in a fragmented industry.
What does Zscaler (ZS) do?
Zscaler is a cloud-native cybersecurity company built around the zero trust security model. Instead of routing traffic through a traditional corporate network perimeter, Zscaler operates a globally distributed cloud platform that sits between users and the applications they access, inspecting traffic and enforcing security policy in real time. Its two flagship products are Zscaler Internet Access (ZIA), which secures connections to the public internet and SaaS apps, and Zscaler Private Access (ZPA), which connects users directly to private applications without exposing the corporate network.
PANW vs ZS: how do they differ?
Both fit overlapping themes, but they are not interchangeable. Palo Alto Networks is best understood through its own drivers, and Zscaler through its. The useful comparison is which set of drivers and risks you want exposure to.
- PANW drivers: Platformization and consolidation; AI-driven security operations.
- ZS drivers: Zero trust replacing legacy perimeter; Platform expansion and upsell.
PANW or ZS: which should you pick?
The bottom line: PANW vs ZS
PANW and ZS are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined PANW and ZS exposure against your real portfolio. It is not an investment adviser.
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Use Palo Alto Networks as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What is the difference between PANW and ZS?
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Palo Alto Networks is one of the largest pure-play cybersecurity companies in the world. Zscaler is a cloud-native cybersecurity company built around the zero trust security model. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is PANW or ZS the better stock?
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Walnut is informational, not investment advice. Neither is universally better; PANW and ZS suit different views and risk levels. Compare what each does, how they make money, and the risks, then decide which fits your thesis and what you already own.
Should you own both PANW and ZS?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both before you add the second.
What are the risks of PANW vs ZS?
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PANW: Cybersecurity is intensely competitive, with rivals like CrowdStrike, Zscaler, Fortinet, and Microsoft contesting different parts of Palo Alto's platform. The platformization strategy can pressure near-term billings and revenue as customers are offered incentives and deferred ramps to consolidate, complicating growth optics. Palo Alto's valuation is rich, so any slowdown in growth or margins can drive sharp share-price swings. Enterprise security spending is somewhat macro-sensitive, and a heavy acquisition history brings integration and goodwill risk. Microsoft's bundling of security into its broader stack is a persistent competitive threat, and a major product failure or breach would be especially damaging for a security vendor. ZS: Zscaler trades at a high revenue multiple, so any deceleration in growth or billings can compress the stock sharply. Competition is intensifying: Palo Alto Networks, Cisco, Cloudflare, and Microsoft all push secure access service edge (SASE) offerings, and Microsoft can bundle security into existing enterprise agreements at aggressive prices. Sales cycles for large deals can lengthen in tighter IT budget environments. The company has historically run GAAP losses due to heavy stock-based compensation, which dilutes shareholders even as free cash flow is positive. Founder-CEO concentration and a premium valuation amplify volatility around quarterly results.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell PANW or ZS; figures are approximate and dated. Verify current data before investing.