Key Takeaways
- CEO Nikesh Arora of Palo Alto Networks pursued acquisition discussions with Okta from late 2024 through early 2025, but negotiations collapsed due to valuation disagreements.
- A separate acquisition approach was made to Datadog CEO Olivier Pomel during spring 2025, which was rejected without reaching the formal offer stage.
- The cybersecurity giant subsequently completed two major acquisitions: CyberArk for $25 billion in July 2025 and Chronosphere for $3.35 billion in January 2026.
- Combined, these acquisitions accounted for $338 million of Palo Alto’s $3 billion quarterly revenue reported in April.
- Current acquisition targets reportedly include Cribl, with a $3.5 billion valuation, and ClickHouse, valued at $15 billion.
A new report published Wednesday by The Information reveals that Palo Alto Networks (PANW) CEO Nikesh Arora attempted to acquire both Okta and Datadog in separate negotiations that ultimately failed to materialize.
Palo Alto Networks, Inc., PANW
During the period spanning late 2024 to early 2025, Arora engaged in multiple meetings with Todd McKinnon, the CEO of Okta. While both parties explored potential product integration opportunities, the discussions eventually reached an impasse due to conflicting views on acquisition pricing.
At the beginning of last year, Okta carried a market valuation of approximately $13.5 billion. Since that time, its value has increased by about 30%, pushing its current market capitalization to nearly $23 billion.
During the spring of 2025, Arora made an approach to Olivier Pomel, CEO of Datadog, to explore a potential acquisition. Datadog’s public market valuation at that point exceeded $40 billion. However, Pomel showed no interest in pursuing the discussion, and negotiations never advanced to a formal proposal stage.
The monitoring and observability platform has since experienced significant growth, with its market capitalization approximately doubling to surpass $80 billion. This dramatic valuation increase makes any future acquisition attempt substantially more challenging from a financial perspective.
Completed Acquisitions
After the Okta and Datadog opportunities dissipated, Palo Alto Networks pivoted to alternative strategic acquisitions. The company finalized a $25 billion deal to acquire CyberArk in July 2025. Following that, in January 2026, it completed a $3.35 billion purchase of Chronosphere, a platform specializing in log data and observability that directly competes with Datadog.
These two strategic purchases collectively generated $338 million in revenue during Palo Alto’s April quarter, which saw total revenue reach $3 billion.
On Wednesday, Palo Alto stock declined 0.38%, closing at $338.60. Meanwhile, Datadog shares surged 2.95% following the disclosure, while Okta experienced a 1.12% decline.
When contacted for comment, a Palo Alto Networks spokesperson stated the company maintains a policy of not addressing “rumors or speculation.” Representatives from both Datadog and Okta declined to provide statements.
Future Acquisition Targets
Arora’s acquisition strategy shows no signs of deceleration. According to reports, he is currently assessing companies that would provide complementary capabilities to the recently acquired Chronosphere platform.
Cribl, a data management company with a $3.5 billion valuation, has emerged as a potential target. ClickHouse, a database technology firm that secured funding at a $15 billion valuation in January 2026, represents another company under consideration.
Additionally, Arora is exploring opportunities within the AI security sector. The strategic rationale centers on the transformation of cyber threat landscapes through AI technologies, which has elevated the importance of continuous security monitoring for enterprise organizations.
Shares of Chronosphere, which trades under the ticker symbol CHRN, dropped 4.64% on Wednesday.
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