Right now, several insider buying stocks are emerging after recent pullbacks, offering investors potential entry points backed by those who know the business best.

Here are three names to watch closely.

Palo Alto Networks Gets a CEO Vote of Confidence

After a bad start to the year, Palo Alto Networks (NASDAQ: PANW) just saw a massive vote of confidence from CEO Nikesh Arora. On March 27, according to US SEC filings, he bought 68,085 shares at prices ranging from $146.46 to $147.48.

Supporting that purchase is the substantial demand for AI-driven cybersecurity. And according to analysts at Macquarie, the speed and scale of AI-driven attacks will drive even greater demand, which should boost cyber stocks such as PANW. 

Wells Fargo also initiated an overweight rating on PANW with a $200 price target. “We view recent stock dislocation as a favorable entry point for exposure to nearly every major secular trend in cybersecurity,” analyst Michael Turrin said, as quoted by Seeking Alpha. “Although M&A creates [near-term] risk, we ultimately see [long-term] reward of path [toward] 10% share in a $300B+ market.”

PANW also boosted its share buyback program, approving an additional $1 billion buyback. That adds to the previous $4.1 billion initiated several years ago. 

SoFi Technologies Attracts Insider Buying After Dip

Insiders are also buying SoFi Technologies (NASDAQ: SOFI) after a post-earnings dip. Rob Lavet, general counsel, bought 5,000 shares for about $21.04 each. Eric Schuppenhauer, the head of borrowing, picked up 5,000 shares at $19.93 per share.

That kind of buying makes sense for a couple of reasons. First, as of March 9, SOFI stock is technically oversold at $15.15. 

Second, the stock was recently upgraded by analysts at JPMorgan Chase to overweight. The firm said, “Momentum in the business is undeniable, as SoFi continues to add new members and deposits at a record pace, while other fintechs report deposit outflows or stagnant member growth, and investments in marketing in ‘25 and 1H26 set the stage for continued premium customer acquisition and engagement for the foreseeable future,” as quoted by Seeking Alpha.

Salesforce Insiders Step In as Stock Turns Oversold

Since the start of the year, Salesforce (NYSE: CRM) has been a train wreck, falling from $267.82 to a recent low of $185.03. Oversold, it is attempting to pivot higher after catching double bottom support. It’s also over-extended on RSI, MACD, and Williams’ %R. Even better, insiders are buying the dip. In fact, the company director and CEO of Williams-Sonoma, Laura Alber, just bought 2,571 shares for $451,166 on March 19.

Director David Kirk bought 2,570 shares for about $194.62 a share, marking his first open-market purchase of the year, according to Barron’s. 

Why Insider Buying Stocks Matter for Investors

While insider buying should never be the sole reason to invest in a stock, it can provide valuable insight into how those closest to the company view its prospects. Recent insider activity in Palo Alto Networks, SoFi Technologies, and Salesforce suggests that key decision-makers see opportunity amid recent pullbacks.

Wall Street analysts anticipate that earnings per share will reach 76 cents on revenue of $2.58 billion. In the year-ago quarter, the cybersecurity giant posted EPS of 81 cents on revenue of $2.26 billion, beating out the consensus targets of 78 cents and $2.24 billion, respectively. Overall, Palo Alto tends to deliver impressive results. Since at least February 2021, the only blemish has been a top-line miss for Q4 2023.

It’s not that the market doesn’t recognize PANW stock as a core investment. Over the past five years, the security has gained 151%. But since May 2024, the company’s market value has been largely flat, punctuated by choppy trading in the middle of the range. Obviously, the hope is that the general public realizes the broader importance of Palo Alto.

Yes, it’s completely understandable that frontline tech companies like Nvidia (NASDAQ: NVDA) garner both the praise and the headlines. However, cybersecurity has always kept the lights on within the digital ecosystem. As artificial intelligence becomes more powerful — and thus leveraged for nefarious purposes — defensive systems will likely only rise in relevance, not diminish.

As such, PANW stock is almost a no-brainer buy. If you anticipate that the selloff may be overextended, the contrarian position may be enticing and possibly discounted.

Volatility Skew Reveals the Inside Baseball for PANW Stock

One of the most important first-order (observational) analyses to consider is volatility skew. Volatility skew is a screener that identifies implied volatility (IV) — or a stock’s potential kinetic output — across the strike price spectrum of a given options chain. For the Feb. 20 expiration date, the prioritization among smart money traders is downside insurance.

Most prominently, put IV on the lower strike boundaries rises sharply higher and above its call equivalent. This setup indicates that a key concern among options traders and institutional investors is downside tail risk. By buying far out-the-money puts, these transactions effectively serve as southbound volatility insurance — and entities are willing to pay a pretty premium for the protection.

On the upper boundaries, put IV is also elevated relative to call IV. This structure implies the crafting of a mechanical short position, possibly to protect actual long exposure to PANW stock. However, the bigger point may come from information by omission. Call IV is generally flat from the at-the-money strike all the way to the upper boundaries.

Basically, we’re looking at a situation where there is practically no urgency for upside convexity. It’s not that the smart money doesn’t believe upside is possible. Rather, the setup is saying that the perceived risk of downside is of a far greater magnitude than the reward to the upside.

I’m not one to arrogantly proclaim that the smart money is wrong here. But because of the extended underperformance of PANW stock — where it’s down about 6% in the past six months — I believe a surprise upswing would lead to a greater magnitude movement.

Either way, because the prioritization is for puts, the calls are relatively cheap on a volatility basis. They could also be considered a discount if a legitimate reason exists to buy them.

Establishing the Trading Parameters of Palo Alto Networks Stock

While we now have a general understanding of smart money sentiment from the volatility skew, we’re still at a loss as to how this translates into actual price outcomes. For that, we may turn to the Black-Scholes-derived expected move calculator. Wall Street’s standard mechanism for pricing options projects that for the Feb. 20 expiration date, Palo Alto Networks stock may land between $152.04 and $178.74.

Where does this dispersion come from? Black-Scholes assumes a world where stock market returns are lognormally distributed. Under this framework, the above range represents where PANW stock may symmetrically land one standard deviation away from spot (while accounting for volatility and days to expiration).

Essentially, what the model teaches us is that in 68% of cases, we would expect PANW stock to trade somewhere within the prescribed range in nine days. That’s a reasonable assumption, if only because it would take an extraordinary catalyst to drive a security beyond one standard deviation from spot. Still, we’re left with a rather sizable peak-to-trough range of almost 18%.

At this juncture, we have largely reached the utility of first-order analyses. We know what the smart money may be thinking and how this could translate into an actual dispersion. However, we only really know the pricing of uncertainty — not whether that pricing is “appropriate,” for lack of a better phrase.

In other words, we’re faced with the classic search-and-rescue (SAR) conundrum. Black-Scholes has identified a distress signal somewhere in the Pacific Ocean, and the expected move calculator provides a search radius. Unfortunately, we live in a world of limited resources (and daylight). Therefore, we can’t always dedicate a full-on search for every single shipwrecked survivor incident.

Essentially, we would need the help of a second-order (conditional) analysis to find where the survivor might have drifted to — and that’s where the Markov property comes into view.

Using Science to Narrow Down the Probability Space

Under Markov, the future state of a system depends entirely on the present state. Colloquially, forward probabilities should not be calculated independently but should be assessed in context. Regarding the SAR analogy, different ocean currents — such as choppy waves versus calm waters — can easily influence where a shipwrecked survivor is likely to be found.

Here’s how the Markov property is relevant for PANW stock. In the last five weeks (I’m tightening the parameters of my trading model), Palo Alto printed only one up week, leading to an overall downward slope. There’s nothing special about this 1-4-D sequence, per se. However, this quantitative signal represents a unique ocean current, which should, by logical deduction, lead to a unique drift pattern.

Through enumerative induction and Bayesian-inspired inference, we can estimate the typical drift associated with the 1-4-D sequence. We then juxtapose this inference onto the current spot price to calculate a forward five-week distribution.

Of course, inductive models aren’t perfect because, philosophically, there’s no compelling reason why the future is necessarily compelled by past observations (per David Hume). Still, from an operational perspective, induction is one of the best tools we have.

Assuming that you accept the premise, the forward five-week returns of PANW stock will likely land between $160 and $185, with probability density peaking near $170. This gives us a much narrower target to aim at.

With the market intelligence above, I’m tempted by the 172.50/175 bull call spread expiring Feb. 20. This wager requires a net debit of $115, which is the most that can be lost. Should PANW stock rise through the $175 strike, the maximum profit would be $135, a payout of over 117%. Breakeven lands at $173.65, improving the trade’s probabilistic credibility.

Fundamentally, cybersecurity represents a line item on the corporate expense sheet that cannot be underserved. All it really takes is one bad data breach to nuke a hard-earned reputation — not to mention the loss of customer trust and heightened regulatory scrutiny. Even worse, cybercriminals are becoming increasingly adept at breaching defenses. And for all its benefits, gen AI would expand the scale and scope of critical vulnerabilities.

It’s also fair to point out that Palo Alto Networks isn’t the only name in cybersecurity. With competition heating up, the company finds itself in challenging waters. With broader economic headwinds weighing on sentiment, PANW stock hasn’t been the strongest performer, gaining less than 13% in the past 52 weeks. For context, the S&P 500 gained more than 19% during the same period.

Nevertheless, the rising sophistication of cybercrime cynically necessitates digital security. Therefore, while Palo Alto may not be the most riveting business, it happens to be one of the most important enterprises. For investors, there’s a long-term case to be made. At the same time, options traders may have an enticing opportunity with PANW stock.

Pushing Upstream into the Informational Space

As a rule of thumb, anytime you place a wager in the market — especially in the options arena — you should assume that you’re operating from a disadvantage. No matter how smart you are, so long as you are classified as a retail market participant, you will always be downstream of pretty much everything.

By the time actionable information gets to your screen, the intelligence has already been filtered down through multiple institutional layers. Even expert opinion — which by nature is a downstream construct — has likely been first disseminated to privileged investors. Unless you are an institutional entity, you are always last to know.

To be blunt, when it comes to access, there is really no way to go upstream. However, this doesn’t mean that you’re forever doomed to be trading with one hand tied behind your back. The fact of the matter is, nobody knows what tomorrow will bring. Therefore, any assertions about tomorrow are never neutral.

Of course, Wall Street can’t just throw its hands up in the air and plead ignorance. Subsequently, market makers will use formulations derived from the Black-Scholes model as a first-order approximation of forward risk pricing. It’s from this model that options-related probabilities come from. However, what’s important to keep in mind is that these probabilities are presuppositional.

Essentially, they’re probabilities relative to a normally distributed world that the Black-Scholes model has created. In this paradigm, risk is calculated monotonically; that is, risk rises in proportion to the target price’s distance away from the spot price. To use a football analogy, a 50-yard field goal represents a much more difficult proposition than a 30-yard attempt.

However, in certain game situations, it’s possible that a 30-yard kick may be more difficult than a 50-yarder. For example, a kicker may have extreme difficulty in a massive crosswind and would prefer a longer attempt in a clean environment.

The problem for market makers is that they can’t just price risk in an unorthodox way for some securities and not for others. Fortunately, the retail trader has no such restrictions and is free to price risk however they want.

My hypothesis, ultimately, is that PANW stock options are incorrectly priced — and bullish speculators may potentially take advantage of this dynamic by going upstream the information space.

Exploiting a Pricing Mismatch for PANW Stock

As one of the most relevant players in the broader tech ecosystem, it shouldn’t come as a surprise that PANW stock enjoys an upward bias. Looking at the security from a hierarchical perspective, past historical data going back to January 2019 reveals that a random 10-week position held in PANW would land between $185 and $202 (assuming a spot price of $189.02).

However, we’re not interested in trading Palo Alto stock for its aggregate behavior but rather the statistical response to its current quantitative structure. In the last 10 weeks, PANW printed only three up weeks, leading to an overall downward slope. Typically, investors may consider this setup to be unusually risky as it implies that the bears have control. Still, under this framework, PANW tends to resolve upward over the next 10 weeks.

Specifically, after the 3-7-D (three up, seven down, downward trend) sequence flashes, Palo Alto stock would be expected to land between $193 and $207. Moreover, probability density would likely peak around $200. What’s even more fascinating, probability decay between $200 and $205 would sharply accelerate. As such, it would make sense to cap off debit-based exposure around the $200 mark.

Looking at Black-Scholes-derived options calculators, the chance that PANW stock will reach $200 by the Feb. 20, 2026, monthly expiration date would be 31.42%. However, a hierarchical model isolating for the response to the 3-7-D sequence shows that a landing spot of $200 is contextually realistic. It’s not a moonshot bit of speculation as the Black-Scholes model implies.

Basically, Wall Street prices risk as a function of distance to the current spot price. However, it has not been proven that PANW stock’s behavioral patterns can be best described by a lognormal, parametric calculation. In my best estimation, the 31.42% figure that Wall Street is calculating is overly pessimistic.

As such, I would be a buyer of PANW stock — but only up to a certain point.

Targeting a Sensible Trade for Palo Alto Stock

Given the market intelligence above, the trade that comes off as the most appealing (in my opinion) is the 195/200 bull call spread expiring Feb. 20. This trade requires PANW stock to rise through the second-leg strike ($200) at expiration. If it does, the maximum payout would clock in at 150%. Breakeven sits at $197, adding to the trade’s probabilistic credibility.

To be sure, there are higher-strike spreads that offer much bigger payouts. However, the expected distribution of PANW stock outcomes reveals a sharp drop in probability density beyond the $202 price point. Therefore, cutting off upside exposure at $200 makes plenty of sense.