Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in PANW.

The cybersecurity sector has long been viewed as a resilient corner of the tech market, but 2025 is testing that thesis in real time. Amid evolving AI-driven threats, Big Tech competition, and geopolitical risk, Palo Alto Networks, Inc. (PANW) sits at the intersection of innovation and disruption. As the industry leader in firewall and cloud security solutions, PANW is no stranger to market-moving headlines — and for short-term traders, that means plenty of potential setups ahead.

The Direxion Daily PANW Bull 2X Shares (Ticker: PALU) and Daily PANW Bear 1X Shares (Ticker: PALD) are built for traders seeking magnified or inverse exposure to PANW’s daily moves.

Here are some fast-developing catalysts that could spark action in the stock:

1. Upcoming Earnings: Will PANW Deliver Another Beat?

Following a 14% year-over-year revenue gain in Q2 2025, PANW next earnings report will be pivotal. Traders should watch for:

• Top-line surprises: Revenue acceleration above the current $2.3B trend

• Next-Gen Security Annual Recurring Revenue (ARR): Key metric for tracking platform growth momentum

• Forward guidance: Any softening in enterprise security demand could trigger swift repricing.

Short-term trading event: PANW earnings call (August 18th -subject to change) offers a high-volatility* window for PALU and PALD traders.

2. Sector Rotation in Tech: Will Cybersecurity Stay in Favor?

PANW has outperformed many enterprise software peers this year. But with increasing chatter around AI overbought conditions, sector rotation into more defensive areas (or out of tech altogether) could hit the stock — or spark a momentum breakout.

Also notable:

• Semiconductors are rebounding, and cloud infrastructure stocks are rallying, which could spill over into security spending.

• Conversely, any soft Consumer Price Index (CPI)* or Producer Price Index (PPI)* inflation* print could reignite growth rotation — temporarily lifting PANW.

Short-term trading event: Next CPI report and Federal Open Market Committee rate decision (both this month) — key macro catalysts that influence tech broadly.

3. Big Tech Competition: Alphabet’s Wiz Deal Isn’t the Last Shot

Alphabet’s $32B acquisition of Wiz, along with a wave of over 20 cybersecurity acquisitions in March 2025, signals Big Tech’s deepening push into PANW’s territory. Future movements could create headline risk — or spark sympathy rallies.

Other potential triggers:

• AWS or Microsoft announcements tied to cybersecurity partnerships

• Start-up IPOs or new M&A rumors targeting PANW competitors like Zscaler or CrowdStrike

4. Real-World Threats and Vulnerability Disclosures

PANW’s firewall vulnerability drew sharp headlines recently, highlighting how zero-day exploits and threat alerts can rattle even the largest names in the sector.

AI-enhanced hacking capabilities and nation-state actors are expected to increase in 2025, making any new breach or exploit a possible catalyst for rapid price movement.

Ongoing short-term triggers:

• U.S. Department of Homeland Security bulletins

• Emergency patches and CVE disclosures

• CrowdStrike, Fortinet, or PANW blog updates

5. Global Tensions and Trade Policy Watch

PANW’s exposure to the EMEA (Europe, Middle East, Africa) and JAPAC (Japan and the Asia-Pacific) regions makes it vulnerable to the Trump administration’s evolving trade policy. While tariffs have been paused for 90 days, any resumption or escalation could drag on the stock.

In contrast, PANW’s Texas-based production shift and access to Foreign Trade Zones could provide tailwinds under U.S.-focused reshoring trends.

Short-term trading events:

• Next G7 Summit

• EU regulatory updates targeting U.S. tech

• Presidential campaign policy speeches on tech and trade

6. Enterprise Security Budgets Amid Economic Crosscurrents

With inflation easing (2.39% in March vs. 2.82% in February), firms may continue spending on cybersecurity — especially as AI-driven threats grow. But any weak guidance from other enterprise IT firms could still pressure PANW sentiment.

Upcoming earnings from:

• ServiceNow (NOW)

• CrowdStrike (CRWD)

• Fortinet (FTNT)

…may create sympathy trades in PALU or PALD.

Short-term trading event: CRWD and FTNT earnings (within next 2–3 weeks) — watch closely for spillover effects.

How Traders Can React: PALU and PALD

For tactical traders looking to express a short-term view on PANW — bullish or bearish — Direxion offers:·

• Direxion Daily PANW Bull 2X Shares (Ticker: PALU): Daily 2X Bull ETF, for those expecting PANW to climb.

• Direxion Daily PANW Bear 1X Shares (Ticker: PALD): Daily -1X Bear ETF, for those anticipating downside action.

These Single Stock Daily Leveraged & Inverse ETFs allow for precise positioning during earnings cycles, headline events, and market rotations — but are built for short-term trades only.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

The Funds have derived all disclosures contained in this document regarding Palo Alto Networks, Inc. from publicly available documents. In connection with the offering of each Fund’s securities, neither the Funds, the Trust, nor the Adviser or any of its respective affiliates has participated in the preparation of such documents. Neither the Funds, the Trust nor the Adviser or any of its respective affiliates makes any representation that such publicly available documents or any other publicly available information regarding Palo Alto Networks, Inc. is accurate or complete. Furthermore, the Funds cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of Palo Alto Networks, Inc. have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning Palo Alto Networks, Inc. could affect the value of a Fund’s investments with respect to Palo Alto Networks, Inc. and therefore the value of the Funds.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with PANW and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with PANW and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to PANW is impacted by PANW’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to PANW at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to PANW increases on days when PANW is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with PANW and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to PANW is impacted by PANW’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to PANW at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to PANW increases on days when PANW is volatile near the close of the trading day.

Palo Alto Networks, Inc. Investing Risk – Issuer-specific attributes may cause an investment held by the Fund to be more volatile than the market generally. Palo Alto Networks, Inc. faces risks associated with: development of new products and services may be difficult; may be unable to attract new customers; reliance on channel partners; credit and liquidity risk of customers; sales to government entities may be subject to greater scrutiny; intense competition; among other risks.

Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production cost.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily PANW Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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