Palo Alto Networks Inc. (NASDAQ:PANW) shares are dipping Tuesday as software stocks broadly pull back amid rising bond yields and oil prices, with the company also set to report fourth-quarter results after today’s market close.

• Palo Alto Networks shares are retreating from recent levels. Why are PANW shares down?

Rising Yields and Oil Prices Weigh On Software Stocks

Bond markets sent the 10-year Treasury yield to 4.80% Tuesday, its highest level since January 2025, while the 30-year climbed to 5.25%, despite the Treasury Department’s move back in August to double its long-dated bond buybacks in an effort to keep a lid on borrowing costs. That step hasn’t been enough to counter inflation running hotter than the Fed’s target alongside a widening federal deficit, with total U.S. debt now above $40 trillion.

Oil added to the pressure too, with Brent up more than 4% and WTI gaining nearly 3% after Iran’s president said Tehran would respond if the U.S. upholds a temporary agreement signed in June, following the first direct military exchange between the two countries since late July. Rising yields tend to hit software and other growth stocks especially hard, since more expensive borrowing makes investors place less value today on profits companies expect to earn further into the future.

Palo Alto Set to Report Fourth-Quarter Results After the Close

Wall Street is looking for Palo Alto to post $3.35 billion in fourth-quarter sales, a jump from the $2.54 billion it brought in during the same period last year, alongside earnings of 98 cents per share versus 95 cents a year earlier. The cybersecurity company has cleared revenue expectations for 11 consecutive quarters running and profit targets in eight of its last ten, and simply matching those numbers tonight would push the company past its own third-quarter revenue mark of $3 billion into new record territory.

If Palo Alto clears those marks tonight, it would reinforce the idea that enterprise demand for cybersecurity, and specifically for AI-related security tools, remains resilient even as broader markets grapple with higher rates and macro uncertainty. A strong beat could also help push the stock back toward its all-time high, something the company is explicitly aiming for with this report.

Palo Alto Posted Accelerating Growth Last Quarter

That upcoming report follows a strong third-quarter showing. For the period ended April 30, Palo Alto’s top line climbed 31% from a year earlier to $3 billion, with $388 million of that boost coming from its recent purchases of CyberArk and Chronosphere.

Chairman and CEO Nikesh Arora described the quarter as “a standout quarter for Palo Alto Networks,” crediting faster organic booking growth to enterprises increasingly leaning on Palo Alto to protect their AI rollouts at scale. He argued that breakthroughs happening at the cutting edge of AI have made cybersecurity a more urgent priority industrywide and are fundamentally altering how the sector will look in years ahead.

Adjusted net income for the quarter came in at $684 million, or 85 cents per diluted share. Adjusted free cash flow reached $910 million for the quarter, and trailing 12-month adjusted free cash flow margin improved to 38.5%. For the fourth quarter, Palo Alto had guided to revenue roughly between $3.35 billion and $3.36 billion, Next-Generation Security ARR of $8.90 billion to $8.95 billion, and adjusted earnings between 96 cents and 98 cents per diluted share.

PANW Shares Are Falling

PANW Price Action: Palo Alto shares were down 6.09% at $358.84 at the time of publication on Tuesday, according to Benzinga Pro.

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