Fortinet’s Earnings Beat Augurs Barnburner Returns as AI Security Threats Mount

The HAL 9000 nightmare is manifesting as agentic ransomware and AI models capable of sophisticated hacking. 

For cybersecurity firms like Fortinet, however, that’s an ideal growth market. Shares in the Sunnyvale, Calif.-based company rose an eye-popping 20% Thursday, a day after executives reported an earnings beat after the bell. Analysts say investors can expect a lot more value where that came from.

Securing Growth 

Fortinet makes custom chips and develops software, including firewalls, to secure networks against hackers and viruses. Demand is on the upswing because of the precipitous rise in AI-powered ransomware and malware (for your daily dose of IRL fear, scientists say AI can now help design actual viruses from scratch, not just computer ones).

Fortinet and its competitors are also seeing a surge in demand driven by what’s called Secure Access Service Edge (SASE). Basically, it’s an industry term for cloud-native architecture that combines various IT security services into a single, unified cloud platform. Notably, this means security occurs at the point of connection rather than in a data center, which is useful for companies with remote workers or multiple locations.

The demand growth registered broadly in the company’s first-quarter results, with revenue rising 20% year over year to $1.8 billion and billings, an important investor metric that indicates future cash flow, up 31% to $2 billion. Both bested Wall Street’s estimates, and had some analysts raving:

• BTIG analyst Gray Powell hailed the results Thursday as “outstanding” and underscored executives’ “materially better than expected” 2026 outlook, which now calls for revenue between $7.7 and $7.9 billion, up from $7.5 to $7.7 billion.
• BTIG raised its recommendation on Fortinet to Buy, and its $125 price target implies shares could rise 39% above Wednesday’s close. Arete Research reversed course, changing Fortinet from Sell to Buy and setting a $104 target price on the strength of cybersecurity opportunities beyond legacy technology.

Thoughts for Bedtime: On the subject of AI security, researchers at Berkeley’s nonprofit Palisade Research found that recent AI systems can autonomously copy themselves across devices to prevent themselves from ever being disabled. “We’re rapidly approaching the point where no one would be able to shut down a rogue AI, because it would be able to self-exfiltrate its weights and copy itself to thousands of computers around the world,” Jeffrey Ladish, the group’s director, told the Guardian on Thursday. Anyway, have a nice, nightmare-free sleep tonight.