Fortinet and ServiceNow Sink in Premarket Trading Despite Growth — What Investors Are Questioning

29 October 2026, 11:00 UTC. Two major enterprise-technology companies reported rising sales on Wednesday, yet their shares came under heavy pressure before Thursday’s U.S. market open. Fortinet was down roughly 25% and ServiceNow about 18% in premarket indications reported by Reuters. Those are indicative premarket moves, not confirmed closing-price declines. The contrast is a reminder that investors assess future growth and valuation, not just whether revenue increased.

Fortinet: rising sales, tougher expectations

Cybersecurity supplier Fortinet reported $2.08 billion in third-quarter revenue, up 20% year over year, and billings of $2.34 billion, up 29%. Product revenue rose 37% to $765 million. The company reported $865 million in non-GAAP free cash flow and raised its 2026 revenue guidance. Those figures come from Fortinet’s earnings release filed with the U.S. Securities and Exchange Commission.

Why could the stock fall after that? Strong reported performance may already have been reflected in a richly valued share price. Reuters reported investor concerns about the outlook for AI-linked data-center security and other product categories. The selloff alone does not prove customer demand has collapsed, and the company’s reported sales and cash generation do not support such a sweeping conclusion.

ServiceNow: subscriptions grew, but a forward indicator matters

Enterprise-software provider ServiceNow reported $4.106 billion in total revenue, up 20.5%, including $3.988 billion of subscription revenue, up 21%. Current remaining performance obligations (cRPO) reached $13.65 billion, up 20.5%; the company forecast about 18.5% cRPO growth for the fourth quarter. These are company-reported measures from its October 28 earnings statement.

cRPO is a measure of contracted revenue expected to be recognized within the next 12 months. It is not the same as cash received or a guarantee of future earnings. The projected slowdown therefore offers one plausible reason investors were cautious even as ServiceNow raised its full-year subscription outlook. Investor’s Business Daily reported that the fourth-quarter cRPO forecast fell short of analysts’ expectations.

What AI optimism can and cannot explain

ServiceNow raised its 2026 AI annual-contract-value target to $1.7 billion, a company target rather than realized revenue. Fortinet pointed to security demand as organizations adopt AI and expand their networks. Both businesses may benefit from those trends, but a larger addressable market does not automatically translate into the pace of revenue, margins or cash returns that investors have priced in.

The broader question is whether recurring revenue, billings and cash flow can keep growing fast enough to justify expectations. Watch subsequent quarterly cRPO, renewal trends, margins and guidance revisions, rather than treating one premarket price move as a verdict on the entire software sector. Stock prices and analyst forecasts may change during the trading session.

Featured image: illustrative data-center equipment photograph by Tyler / Unsplash, used under the Unsplash License. It does not depict Fortinet or ServiceNow facilities.

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