Fortinet Inc. (NASDAQ:FTNT) shares dropped about 25% in premarket trading on Thursday following its third-quarter earnings report, a decline Jim Cramer attributes to the company’s reliance on its “hardware business” while losing market share to Palo Alto Networks Inc. (NASDAQ:PANW). Cramer stated Fortinet is “getting killed” by competitors offering a comprehensive platform.
Cramer Highlights Platform Competition
The post-earnings selloff prompted market commentary from Cramer. On Thursday in a post on X, Cramer criticized Fortinet’s business model. “Fortinet is a single threaded hardware business for heaven’s sakes, like Palo Alto WAS before Nikesh Arora turned it into a powerhouse platform business,” Cramer wrote.
Cramer advised investors against selling Palo Alto stock in reaction to Fortinet’s share price decline. He stated that investors adopting that strategy are “missing the point.”
PANW was down about 6.6% in premarket trading on Thursday. Cramer concluded his post by asserting that “Fortinet is going down BECAUSE it is getting killed by the likes of Palo Alto.”
Fortinet is a single threaded hardware business for heaven's sakes, like Palo Alto WAS before Nikesh Arora turned it into a powerhouse platform business. You want to sell stocks like Palo Alto down on Fortinet you may be missing the point: Fortinet is going down BECAUSE it is…
— Jim Cramer (@jimcramer) October 29, 2026
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Stock Plummets Despite Earnings Beat
Despite beating analyst estimates, Fortinet stock plunged; it reported 91 cents in quarterly earnings per share, beating the 86-cent estimate, and $2.08 billion in quarterly revenue, surpassing the $2.06 billion consensus.
CFO Christiane Ohlgart stated during the Oct. 28 earnings call that service revenue “faced some headwinds from winning new large enterprise customers with ramp service activations and large new expansion deals that also consolidated various existing service arrangements into enterprise agreements.”
"We are very pleased with our excellent third quarter results, which reflect strong execution and broad-based demand across our entire portfolio, allowing us to raise our 2026 billings guidance for the third time this year," said CEO Ken Xie.
How Have These Stocks Performed?
| Stocks | 1-Month | 6-Months | YTD | 1-Year | 5-Year |
| FTNT | -1.07% | 102.16% | 119.22% | 106.70% | 158.78% |
| PANW | 1.57% | 117.30% | 114.16% | 81.66% | 364.93% |
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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