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Fortinet recently reported its third-quarter earnings, with revenue rising to US$1.72 billion and the company launching its Secure AI Data Center solution to address the protection of AI infrastructure and large language models.
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While financial results exceeded expectations and highlighted new product innovation, the announcements were accompanied by concerns regarding slower services revenue growth and active securities class action lawsuits related to alleged misstatements on product upgrade cycles.
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We’ll review how the launch of Secure AI Data Center and mixed guidance may alter Fortinet’s long-term investment narrative.
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To be a Fortinet shareholder, you need conviction that the company will continue translating heightened global cybersecurity demand into durable growth, even as its hardware upgrade cycle matures. The latest earnings and Secure AI Data Center launch reinforce Fortinet’s innovation credentials and leadership, but the most important short-term catalyst, strong product adoption, is counterbalanced by the primary risk: slowing service revenue growth. For now, neither the positive product news nor the legal headlines appear to materially shift that near-term risk and catalyst dynamic.
Among Fortinet’s recent announcements, the introduction of the Secure AI Data Center solution stands out for its relevance. This offering positions Fortinet at the forefront of securing emerging AI infrastructure, responding to both rising enterprise needs and regulatory expectations. Adoption and revenue growth from such next-gen solutions could help offset risks related to decelerating upgrade cycles and service trends.
However, with ongoing class action lawsuits over alleged product cycle misstatements, investors should keep in mind the potential financial and reputational consequences if …
Read the full narrative on Fortinet (it’s free!)
Fortinet’s narrative projects $9.2 billion revenue and $2.4 billion earnings by 2028. This requires 13.1% yearly revenue growth and a $0.5 billion earnings increase from $1.9 billion today.
Uncover how Fortinet’s forecasts yield a $90.32 fair value, a 5% upside to its current price.
Twenty-five members of the Simply Wall St Community estimate Fortinet’s fair value spans from US$83.65 to US$110.39. Participants highlight diverging outlooks, while many are watching if product-led growth can balance out weaker service revenue trends over time.
