Is Fortinet's FortiGuard AI Service Becoming a Key Growth Driver?
Fortinet 's FTNT FortiGuard AI-powered security services have been gaining traction as more enterprises turn to real-time, automated protection to secure users, data and infrastructure. These services, which include threat intelligence, intrusion prevention, data loss prevention (DLP), antivirus and web filtering, are powered by FortiGuard Labs' global sensor network and AI models.
Strong adoption has been driving top-line growth. In the first quarter of fiscal 2025, service revenues of $1.08 billion increased 14% year over year. Security subscriptions, including FortiGuard services, grew 16% year over year and remain a key driver of service growth. It made up 57.7% of Fortinet's service revenues in the first quarter. Services now make up more than 70% of Fortinet's total revenues, underscoring the importance of recurring, AI-powered solutions in its business model.
Fortinet's continued focus on expanding FortiGuard's reach is visible in the launch of its AI-powered Workspace Security Suite. The suite protects key productivity platforms like Microsoft 365 and Google Workspace with AI-based phishing detection, impersonation defense, DLP and 24/7 incident response. These capabilities are fully backed by FortiGuard's intelligence and seamlessly integrate into Fortinet's broader Security Fabric to automate threat response and improve detection accuracy.
Fortinet's AI services are a long-term growth driver. The company is deepening AI integration across its service portfolio and holds more than 500 AI-related patents. As demand grows for scalable, intelligence-led protection across hybrid and cloud environments, Fortinet expects its AI-enhanced services, such as FortiGuard, to contribute meaningfully to recurring, high-margin revenue growth.
FTNT Faces Stiff Competition
Fortinet's FortiGuard AI-powered services face growing competition from Palo Alto Networks PANW and Cisco Systems CSCO, both of which are expanding their AI security capabilities.
Palo Alto Networks is expanding its AI security footprint with the acquisition of Protect AI, a leader in securing AI and ML applications. The move strengthens Palo Alto Networks' capabilities to defend against emerging threats like model manipulation and prompt injection. It reflects the company's push to lead in next-generation cybersecurity by addressing risks in the growing AI ecosystem.
Meanwhile, Cisco Systems is boosting its AI security capabilities with updates to its XDR and Splunk platforms. It introduced agentic AI for faster threat detection and launched Foundation AI, featuring the first reasoning model for security. Cisco Systems also expanded its partnership with ServiceNow to support secure, scalable AI adoption.
FTNT's Share Price Performance, Valuation and Estimates
FTNT shares have risen 9.8% in the year-to-date (YTD) period, underperforming the Zacks Security industry's growth of 21.9%. FTNT has outperformed the Zacks Computer and Technology sector's return of 1.3%.
FTNT's YTD Price Performance
From a valuation standpoint, Fortinet stock is currently trading at a Price/Book ratio of 40.88X compared with the industry's 24.58X. FTNT has a Value Score of F.
FTNT Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 59 cents per share, unchanged over the past 30 days, indicating 3.51% year-over-year growth.
The consensus mark for 2025 earnings is pegged at $2.48 per share, which has been revised upward by 2 cents over the past 30 days. The estimate indicates 4.64% year-over-year growth.
Fortinet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cisco Systems, Inc. (CSCO): Free Stock Analysis Report
Fortinet, Inc. (FTNT): Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
41 minutes ago
- Globe and Mail
Prediction: This Artificial Intelligence (AI) Stock Could Be the Next Nvidia -- and It's Not What You Think
Nvidia has been at the forefront of the artificial intelligence (AI) revolution thanks to its powerful graphics processing units (GPUs), which have allowed companies and governments around the globe to train and deploy AI models and applications. The semiconductor giant literally kicked off the AI craze with its A100 GPUs, which were used to train ChatGPT. Since then, multiple AI models from several companies have been trained and brought into production with Nvidia's chips. In fact, Nvidia continues to dominate the AI chip market even now, establishing a big lead over its rivals. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Nvidia's AI-fueled growth has powered a massive surge in its stock price in the past three years. The stock remains a solid bet even after its phenomenal run thanks to the huge addressable market it is serving. However, there is another company that has the potential to dominate its industry -- just like Nvidia does -- thanks to AI. Let's take a closer look at that name and see why it could turn out to be a solid addition to your portfolio. This tech giant's AI tools are driving solid gains for customers Nvidia has left little room for other chipmakers to make a dent in the AI chip market. So, investors looking for another company with the ability to become a leading player in its market and deliver healthy stock price upside in the long run should consider Meta Platforms (NASDAQ: META) for their portfolios. That's because Meta is using AI to corner a bigger share of the lucrative digital advertising market. The social media giant has been able to substantially increase advertisers' returns on ad dollars spent with the help of its AI tools. Last month, Meta pointed out that its AI-focused advertising tools are driving a 22% improvement in returns on ad spending for advertisers. Every dollar spent by advertisers in the U.S. on the company's AI ad tools is generating an impressive return of $4.52. Not surprisingly, Meta plans to enable advertisers to fully create and optimize ad campaigns with AI by the end of 2026. Such a move means that brands and advertisers won't have to go through agencies to purchase ad inventories and plan their campaigns, as all of this would be handled by AI. As a result, it won't be surprising to see smaller brands and companies that lack the budgets to hire marketing agencies flocking to use Meta's AI tools to reach their audience. Even bigger brands could directly go to Meta to further enhance their returns on ad dollars spent. All this could pave the way for stronger growth in Meta's revenue and earnings. The company's top line increased by 16% in the first quarter of 2025, while its adjusted earnings increased at a better pace of 37%. The stronger bottom-line growth can be attributed to a 10% increase in the average price per ad delivered by Meta last quarter. Ad impressions also increased by 5% year over year, indicating that there was an increase in the number of times users viewed ads on its platform. A big reason why Meta can keep attracting more advertising dollars is because of its massive daily active user base of 3.43 billion across its various apps. With AI helping brands and advertisers improve audience targeting, there is a good chance that it may be able to clock strong growth in the average price per ad and the number of ad impressions it delivers in the future. This could eventually help Meta Platforms to continue growing at a faster pace than the digital ad market and its peers. According to eMarketer, global digital ad revenue increased by 12% last year and is forecast to jump another 10% this year. Meta's 2024 revenue increased by 22%, and its performance in the first quarter of 2025 suggests that it is on track to outgrow the industry once again. So, it is evident that AI is helping Meta Platforms become a bigger player in the digital ad market, and management is confident that this could lead to remarkable growth in the long run. AI could send Meta Platforms' revenue soaring in the long run Meta is expected to finish 2025 with $187 billion in revenue, according to consensus estimates. AI is expected to contribute $2 billion to $3 billion of that revenue this year, according to the company's internal estimates. But by 2035, Meta sees its AI revenue ranging anywhere between $460 billion and a whopping $1.4 trillion. While that's a very wide range and an ambitious target, especially at the high end, investors would do well to note that the overall digital ad market is expected to exceed $1.5 trillion in revenue by 2035, according to third-party estimates. So, there is a good chance that Meta could indeed capture a huge share of this lucrative end-market opportunity on offer considering that it has been gaining ground in the digital ad space. So, investors looking for an AI stock that has the potential to generate Nvidia-like returns in the long run would do well to buy Meta Platforms right away as it is trading at an attractive 27 times earnings, a discount to the tech-laden Nasdaq-100 index's earnings multiple of 30. Should you invest $1,000 in Meta Platforms right now? Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor 's total average return is996% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Globe and Mail
an hour ago
- Globe and Mail
Better Energy Stock: TotalEnergies vs. Chevron
For investors, choosing between two similar companies to add to a portfolio can be a challenging process. Chevron (NYSE: CVX) and TotalEnergies (NYSE: TTE) offer a great example of this. Both are integrated energy giants. Both stocks offer high yields. But they have slightly different positive and negative attributes. So which one might be the better fit for your dividend portfolio? What do Chevron and TotalEnergies do? As integrated energy companies, Chevron and TotalEnergies have operations in the upstream segment (oil and natural gas production), the midstream segment (energy transportation), and the downstream segment (chemicals and refining). Each part of the energy industry operates a little differently from the others, and having exposure across all of them helps soften the impacts that volatile commodity prices can have on their results. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Oil and natural gas prices are still the main driver of each company's financial results, and have huge impacts on their stock prices. But compared to pure-play drillers or chemical companies, Chevron and TotalEnergies tend to get through the typical energy cycle more easily. Each of these companies also has material geographic diversification. That said, Chevron is a U.S. company and it tends to have more exposure to its home market. TotalEnergies is a French company and it tends to have more exposure to Europe. Overall, however, the energy businesses are fairly similar. But these two companies are not interchangeable. That is highlighted by the fact that at their current share prices, Chevron's dividend yield is 4.8% and TotalEnergies yield is 6.5%. And the differences matter here. How are Chevron and TotalEnergies different? If you are an income investor, you'll be interested to know that Chevron has increased its dividend annually for 38 consecutive years. That's an impressive record given the inherent volatility of the energy sector. TotalEnergies's track record isn't as impressive, but it has gone through different dividend policies. Like most European companies it was a semi-annual payer before more recently shifting to quarterly payments. And for a stretch it targeted a set percentage of free cash flow, which meant its dividend varied. However, it has paid dividends for decades and more recently has focused on a progressive dividend, meaning it has been steadily increasing its payouts of late. Notably, however, when its European peers BP and Shell cut their dividends in 2020, TotalEnergies maintained its dividend, with management specifically stating that it was aware of the importance of the payment to its shareholders. On dividend reliability, Chevron wins, but TotalEnergies isn't exactly a bad deal. Chevron's balance sheet is among the strongest of its closest peer group, with a debt-to-equity ratio of around 0.2. TotalEnergies' debt-to-equity ratio is 0.5. That's much higher, of course, but TotalEnergies carries more debt and more cash. For example, Chevron ended the first quarter of 2025 with around $4.6 billion in cash on its balance sheet while TotalEnergies had $29 billion. Having less debt is better than having more debt and more cash, but TotalEnergies is still a financially strong company. This point is probably a wash. TotalEnergies is making a public push to use its fossil fuel profits to expand into the electricity space, with a focus on renewable power. This part of the business made up around 10% of its adjusted net operating income in 2024. Chevron is sticking more closely to its core oil and natural gas operations. If you are looking for an energy company that is adjusting today for a future world that relies more on clean energy, TotalEnergies is the easy winner. To be fair, BP and Shell have both discussed doing something similar. But they each used a clean energy shift as the excuse for their 2020 dividend cuts. Then, they both walked back their clean energy plans. TotalEnergies actually made the change and didn't resort to a dividend cut. So it stands out from Chevron, BP, and Shell when it comes to renewable energy. Which one will you pick? Chevron is facing some company-specific issues right now, including an acquisition that isn't going as well as hoped and some geopolitical upheaval around its operations in Venezuela. That's why its yield is so attractive relative to U.S. peer ExxonMobil, which has a yield of just 3.8%. TotalEnergies' dividend yield isn't quite as good as it looks, meanwhile, because U.S. investors have to pay French fees and taxes on it (though some of that can be claimed back come April 15). All in all, there are a lot of positives and negatives to consider with these two high-yield integrated energy giants. My preference is to err on the side of clean energy since the world is clearly in the middle of an energy transition. Add in the lofty yield and management's dividend support during the pandemic, and it's clear that TotalEnergies is a better fit for my portfolio based on my general beliefs about the future of the energy sector and income desires. But there's a strong case to be made for investing in Chevron, too, particularly if you prefer to keep your taxes as simple as possible and if you prize dividend consistency as much as dividend yield. Should you invest $1,000 in Chevron right now? Before you buy stock in Chevron, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor 's total average return is996% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
CBC
an hour ago
- CBC
'Mega' dairy projects in North Dakota will pollute Red River, environmental activists say
A group of environmentalists from Manitoba and the United States say two "mega" dairy farms slated for North Dakota will hurt the health of the Red River, with nutrients from animal waste potentially draining downstream to Lake Winnipeg. "Water and pollution do not respect political lines," Madeline Luke, a volunteer with the U.S. environment non-profit North Dakota Resource Council. "Our potential problems are yours as well, and Lake Winnipeg is running out of time." Luke and other environmentalists spoke at a news conference on Wednesday at The Forks, where the Red and Assiniboine rivers meet in Winnipeg, pushing for the halt of two major dairy operations in North Dakota. Riverview LLP, a Minnesota-based agriculture business, is planning to build two dairy facilities with around 37,500 head of cattle. Animal waste from these facilities could end up in the Red River, spreading diseases and excessive nutrients from manure downstream into Lake Winnipeg, Luke said. "Having this many animals, and that smaller space, generating that much waste untreated makes it difficult to find a place to put [it] safely," she said. "From a biological, animal health and water quality point of view, it's probably not a good idea." The largest of the two dairies will house 25,000 cows in Herberg, N.D., a township nearly 300 kilometres south of Winnipeg. Part of the facility, including a section of the waste lagoons where manure will be treated, is in a floodplain — heightening the risk that spring melts or heavy rains will spread pollutants into waterways, including the Red River, which is just over two kilometres away from the facility, Lukes said. The other farm will sit in an aquifer and between the Wild Rice and Red rivers in Abercrombie, N.D., about 400 kilometres south of Winnipeg. Lukes said around 12,500 cows are expected to produce 405 million litres of waste every year, and that could contaminate nearby streams and service drains. Permits to operate the Abercrombie facility were issued by the North Dakota Department of Environmental Quality earlier this year, and they are currently in the bidding process for building the facility, said James Beddome, the executive director of the Manitoba Eco-Network. "There's a need to get action quickly. Maybe there's a hope of them reconsidering their development plans immediately," he said. The Department of Environmental Quality is still reviewing the permit application for the facility in Herberg, after public consultations wrapped up last week, a spokesperson for the department told CBC. "I'm hoping that we're going to see Manitobans speak up and have their voices heard," Beddome said. "Lake Winnipeg has been dubbed the most threatened lake in the world. It can't handle more stressors." A spokesperson for Riverview LLP told CBC News the concerns raised about the proposed farms are not accurate. In a statement, the company said the farms will be designed, built and operated to "protect surface waters and prevent water pollution." Manure will be collected and stored in a synthetic covered lagoon, before it is tilled into the soil on surrounding farmland as an organic fertilizer. Both farms are subject to a "robust environmental permitting process," which does not allow for discharge of waste to surface waters, the spokesperson said. 'We don't have time' But Vicki Burns with the Save Lake Winnipeg Project is concerned waste from the dairies could spike the levels of phosphorus and nitrogen in the Red River. Both nutrients are present in manure, but sewage and treatment plants reduce their concentration before waste is released back into waterways, Burns said. However, the manure at the dairy facilities is expected to be used as fertilizer, so the levels of phosphorus and nitrogen won't be reduced, Burns said. Crops can absorb the nutrients, "but they don't necessarily take up all [of it]," she said, and when that doesn't happen, they become available to run off. "That's what we're afraid is going to happen with these mega dairy projects," Burns said. Phosphorus, in particular, can foster the growth of blue-green algae in Lake Winnipeg, Burns said, releasing toxins that are dangerous to humans and animals. When blue-green algae propagates in the water, fish are displaced to other sections of the lake, said Fred Veldink, who is with the Coalition to Save Lake Winnipeg. "We have already seen a discolouring in the lake that usually indicates an upcoming blue-green algae bloom," he said. "Fishermen are usually the first ones to suffer." Runoff from the large dairies would work against the province's goal of reducing phosphorus concentrations in the lake by 50 per cent, to pre-1990 levels. "If these mega dairy projects go ahead, that is an impossible goal to reach," Burns said. "We're definitely not at a point of no return, but we don't have time to waste." Manitoba Environment and Climate Change Minister Mike Moyes told CBC News his office is aware of the projects, and concerns they could increase nutrient levels in the province. His office has asked the International Joint Commission's International Red River Watershed Board to engage with North Dakota on efforts to mitigate the impact of the projects.
