Key Highlights

● Fortinet plunged in extended trading after its report.

● ServiceNow tumbled on weak guidance after an acquisition.

● Not every security name fell, with Gen Digital rising.

● The selling reflected investor caution about margins and guidance.

Cybersecurity stocks were among the casualties of the after-hours selloff, with Fortinet plunging in extended trading after its third-quarter report, while ServiceNow, which has been expanding into security through an acquisition, tumbled after missing estimates. Reports differed on the size of both after-hours drops, but each was steep.

Fortinet, which sells firewalls and network security software, was already under pressure before its report, sliding during the regular session, and after the bell, the losses deepened sharply, with accounts of the results varying over whether gross margin fell short or the quarter was solid.

ServiceNow and Its Acquisition

ServiceNow, best known for workflow automation software, has pushed further into cybersecurity through its acquisition of Armis, a deal that weighed on third-quarter results, according to market reports. Adjusted earnings missed estimates by a narrow margin, and fourth-quarter guidance and an AI target underwhelmed.

The shares tumbled after the bell, adding to pressure on enterprise software stocks more broadly.

A Bright Spot

Not every security name fell, as Gen Digital, which sells consumer cybersecurity products, rose in extended trading after reporting revenue and bookings growth, higher earnings and a raised full-year outlook.

Demand for security products is often linked to the threat of cyberattacks, and Boston Scientific, for example, cited a cybersecurity incident as a factor in its trimmed outlook, showing how cyber risk is rippling through corporate earnings beyond the security sector itself.