The cybersecurity market is heating up: According to a Wall Street Journal report published Tuesday, Palo Alto Networks is in advanced negotiations to acquire Israeli company CyberArk for more than $20 billion.
Palo Alto, the world’s largest cybersecurity company with a market capitalization of $130 billion, is eyeing CyberArk, a recognized leader in the identity management space, which is currently valued at $19 billion on Wall Street. Following the report, CyberArk’s stock surged by 13% in U.S. trading, while Palo Alto’s stock declined by 3%.
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Cyberark and Palo Alto Networkds.
(Photo: David Paul Morris/Bloomberg, ShU studio/Shutterstock)
If completed, the deal would mark the largest cybersecurity acquisition since Google’s $32 billion purchase of Israeli-founded Wiz. Palo Alto, founded by Israeli entrepreneur Nir Zuk, had also reportedly been in talks to acquire another Israeli company, SentinelOne, in a deal estimated at around $10 billion. With a CyberArk acquisition, those talks are likely to end. SentinelOne shares dropped 3.5% in response.
Until now, CyberArk has been on the buying side. It acquired U.S.-based Venafi for $1.5 billion in 2023, and earlier this year purchased identity governance startup Zilla for $165 million. These moves helped drive CyberArk’s annual revenue past $1 billion in 2024, reflecting 33% year-over-year growth. The company expects 2025 revenue to reach $1.3 billion, with a projected 32% growth rate. Operating profit is forecast to rise to 17%, with total profit expected to hit $220 million.
According to the Wall Street Journal, the deal may be announced later this week. It would be the largest acquisition ever by Palo Alto Networks, which has previously acquired more than ten companies, mostly smaller, privately held firms.
For Palo Alto, the deal would not only add a publicly traded company to its portfolio but also allow it to pay in stock rather than only cash. While Palo Alto has built a “supermarket” of cybersecurity solutions, it has largely avoided identity management, a sector once considered mature. But with the rise of AI and a string of high-profile breaches exploiting identity gaps, the space is experiencing renewed urgency.
CyberArk’s position has also strengthened due to the decline of its main U.S. competitor, Okta, which has lost over 50% of its value in the past five years and is now valued below CyberArk. For Palo Alto, the acquisition would be a strategic entry into a market where it currently has little presence, but one that has become increasingly vital in the evolving threat landscape.
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