Palo Alto Networks' (PANW) fiscal Q4 results showed the company is seeing the AI cyber risk threat environment as a "meaningful" catalyst, Morgan Stanley said in a note Wednesday.

"FQ4 cleared most top-line bogeys, with particular strength in network, identity, observability," the report said.

The report said enterprises need to address technical debt and secure AI implementations amid rising cyber risk threat, with the firm putting over $1 trillion of technical debt to be addressed.

"With PANW having single digit share of the cyber TAM, and growing parts of the TAM they are addressing, we don't see

opportunity as capped for the name," the note said.

Morgan Stanley kept its overweight rating and lifted its price target to $394 from $387.

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