A Palo Alto Networks logo is seen in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration

(Reuters) -Palo Alto Networks said on Wednesday it will buy cloud management and monitoring company Chronosphere for $3.35 billion, as the cybersecurity firm looks to strengthen its AI offerings.

The Santa Clara, California-based company plans to integrate Chronosphere with Cortex AgentiX platform, allowing use of its AI agents on the cloud management firm's data to detect performance issues and autonomously investigate their root cause.

Palo Alto will pay the deal amount in cash and new equity to substitute old awards. The deal is expected to close in the second half of fiscal 2026.

Separately, Palo Alto raised its annual revenue and profit forecasts on expectations of a surge in demand for its cybersecurity solutions to tackle rising online threats.

For fiscal 2026, Palo Alto now sees revenue in the range of $10.50 billion to $10.54 billion, compared with its earlier outlook of $10.48 billion to $10.53 billion.

It expects annual adjusted profit per share of $3.80 to $3.90, higher than the $3.75 to $3.85 it had forecast earlier.

Cybersecurity spending has remained resilient, underpinned by threats from nation-state actors and increasingly sophisticated ransomware attacks, benefiting companies such as Palo Alto.

(Reporting by Juby Babu in Mexico City; Editing by Alan Barona and Leroy Leo)