Hamza Fodderwala

David Sacks says the data kills the open-source-is-winning narrative, closed models just went from 81% to 89% of enterprise spend. "This is why the share of wallet of closed models actually increased. I think that open source went from 19% last year to 11% this year. So open source as a share of enterprise spending is actually decreasing... Anyone who's saying these closed models are somehow losing, you're just not seeing it in the data." "Nikesh Arora said enterprises would like what he called model fungibility. They would love to commoditize these models and just hot swap them, headless. But then what do you do about memory, context, history? No one's really figured out a way to abstract that stuff away from the model yet."

Just finished north of 200 meetings in Europe with customers and technologists. The conversations were primarily around AI, common questions include: 1. Are there examples of organizations who have been able to demonstrate production level systems and do those developments show a return in lower cost, efficiency or better top line? 2. What do you think about agents? How will we discover, govern and stop agents if need be. Perhaps the biggest security concern ATM. 3. The frontier AI models are expensive, what's the business case at these token prices to embed AI in our customer facing products? Where will token prices be in the future. 4. What are the longer term implications of Mythos like models? Do we need to update cyber infrastructure or all IT infrastructure? 5. What do you think of Chinese opensource models? Are they secure and what is the downside of using them if they can be secured and they are cheaper? The parts that surprised me were: 1. The pausing of Mythos and Fable 5 caused more consternation and concern in Europe both short term and raised longer term concerns on single model reliance or reliance or models not in ones control. I hadn't seen it from their POV. 2. Sovereignity which was always a topic and still is, is getting more nuanced - they want data residency, data localization and local resources, but there seems to be more willingness to accept global services on clouds. Classified systems continue to be an issue. Net net - we need to ensure we continue to build trust both on our Frontier models and their consistent availability, we need to get the right economics in place and spend more time in Europe communicating and building presence if we want AI adoption to keep pace with the US.

$PANW The new partnership between $PANW, IBM, and Red Hat may not immediately move revenue—but strategically, it’s far more important than it appears. Cybersecurity is changing. As AI enables attackers to discover and exploit vulnerabilities faster than ever, organizations can no longer wait days or weeks for software updates before protecting critical infrastructure. That’s where virtual patching becomes increasingly valuable. Instead of waiting for developers to release and deploy a permanent software fix, Palo Alto’s technology allows enterprises to implement network-level protection almost immediately, dramatically reducing the window in which attackers can exploit newly discovered vulnerabilities. This is exactly why the collaboration with IBM’s Project Lightwell matters. It connects vulnerability discovery, threat intelligence, exposure management, and automated remediation into a unified security workflow. The result is a more proactive security architecture—one that protects systems while permanent patches are still being developed and tested. In an AI-driven threat landscape, speed becomes a competitive advantage. The faster an organization can detect, prioritize, and mitigate vulnerabilities, the lower its operational risk. From an investment perspective, this partnership reinforces several long-term themes: • Palo Alto continues expanding beyond a firewall vendor into a comprehensive AI-powered cybersecurity platform. • Deeper integration with enterprise leaders like IBM and Red Hat strengthens customer stickiness and raises switching costs. • Platform consolidation remains a major enterprise trend, as organizations increasingly prefer integrated security ecosystems over dozens of standalone tools. • AI is accelerating both cyberattacks and cyber defense, creating sustained demand for automated, real-time protection. Importantly, analyst Shrenik Kothari maintained his Buy rating with a $320 price target, while Wells Fargo also reiterated a Buy with a $325 target. The unchanged price targets suggest analysts view this partnership not as a one-off catalyst, but as further validation of Palo Alto’s long-term strategy. The market often focuses on quarterly contracts. Long-term investors should pay attention to strategic integrations that make a platform more indispensable over time. In cybersecurity, the companies that become embedded in enterprise workflows often become the hardest to replace. That may prove to be Palo Alto Networks’ biggest competitive advantage over the next decade.

The Warriors have their new Challenge Coach….😂😂😂😂