Can Microsoft Outrun Palo Alto Networks in the Next Rally?
Palo Alto Networks surged 16% during the past Week. You may be tempted to buy more, or may want to reduce your exposure. But there is an entirely different perspective you might be missing. Is there a better alternative? Turns out, its peer Microsoft gives you more. Microsoft (MSFT) stock offers superior revenue growth across key periods, better profitability, and relatively lower valuation vs Palo Alto Networks (PANW) stock, suggesting you may be better off investing in MSFT
- MSFT’s quarterly revenue growth was 18.3%, vs. PANW’s 14.9%.
- In addition, its Last 12 Months revenue growth came in at 17.9%, ahead of PANW’s 15.4%.
- MSFT leads on profitability over both periods – LTM margin of 46.8% and 3-year average of 45.6%.
These differences become even clearer when you look at the financials side by side. The table highlights how PANW’s fundamentals stack up against those of MSFT on growth, margins, momentum, and valuation multiples.
Valuation & Performance Overview
| PANW | MSFT | Preferred | |
|---|---|---|---|
| Valuation | |||
| P/EBIT Ratio | 105.8 | 20.6 | MSFT |
| Revenue Growth | |||
| Last Quarter | 14.9% | 18.3% | MSFT |
| Last 12 Months | 15.4% | 17.9% | MSFT |
| Last 3 Year Average | 17.2% | 15.3% | PANW |
| Operating Margins | |||
| Last 12 Months | 14.4% | 46.8% | MSFT |
| Last 3 Year Average | 11.1% | 45.6% | MSFT |
| Momentum | |||
| Last 3 Year Return | 116.7% | 36.2% | PANW |
Note: For “Last 3 Year Return” metric, preferred stock is one with higher returns unless the returns are too high (>300%) which creates risk of sell off.
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See detailed fundamentals on Buy or Sell MSFT Stock and Buy or Sell PANW Stock. Below we compare market return and related metrics across years.
Historical Market Performance
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | Avg | Best | |
|---|---|---|---|---|---|---|---|---|---|
| Returns | |||||||||
| PANW Return | 57% | -25% | 111% | 23% | 1% | 13% | 251% | <=== | |
| MSFT Return | 52% | -28% | 58% | 13% | 16% | -14% | 95% | ||
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 8% | 97% | ||
| Monthly Win Rates [3] | |||||||||
| PANW Win Rate | 83% | 42% | 58% | 58% | 67% | 60% | 61% | ||
| MSFT Win Rate | 75% | 25% | 67% | 58% | 42% | 40% | 51% | ||
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 60% | 64% | <=== | |
| Max Drawdowns [4] | |||||||||
| PANW Max Drawdown | -11% | -26% | -4% | -11% | -16% | -23% | -15% | ||
| MSFT Max Drawdown | -5% | -36% | -7% | -2% | -16% | -26% | -15% | ||
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | -9% | <=== | |
[1] Cumulative total returns since the beginning of 2021
[2] 2026 data is for the year up to 5/11/2026 (YTD)
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
No matter how good the numbers, stock investment is never a smooth ride. There is a risk you must factor in. Read PANW Dip Buyer Analyses to see how the stock has fallen and recovered in the past.
Still not sure about PANW or MSFT? Consider portfolio approach.
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