Fortinet (FTNT)

Network security — FortiGate firewalls (custom ASICs) + SD-WAN/SASE — hardware+software security fabric

AI exposure 8% — derived from reported segment revenue, not asserted.

Where it sits

Software Stack → Cybersecurity · figures rebased to Q2 2026, reported 2026-07-29

FortiGuard security subscriptions + Unified SASE + SecOps + support (recurring) leads 2 businesses in this sub-tier that together are 100% of revenue, so Cybersecurity is effectively the whole company rather than one leg of it.

Reported segments

• Service (Security Subscriptions + Support) — 62.2% of revenue
• Product (FortiGate appliances) — 37.7% of revenue

Fortinet ($2.05B Q2 2026, +26% YoY). Service 62.2% ($1,274.9M, +14% — FortiGuard subscriptions plus support) = primary B5 Cybersecurity; Product 37.7% ($773.0M, +52% — FortiGate appliances on custom SPU ASICs, the standout line). Management attributes the acceleration to AI data-centre, SASE and OT security demand, so the appliance cycle is being pulled by the same build-out.

How the 8% is built

• Service (Security Subscriptions + Support) — 62.2% of revenue × 8% AI-driven (disclosed). Security subscriptions attach to the installed base; AI data-centre and SASE demand is a growing slice rather than the base
• Product (FortiGate appliances) — 37.7% of revenue × 8% AI-driven (disclosed). FortiGate appliances are being pulled partly by AI data-centre and OT security build-out, on a broad enterprise base

Investment read

Moat. Custom-ASIC firewall advantage (price/performance) + broad portfolio + strong mid-market/distributed-edge position; the hardware-software security integrator.

Bottleneck / pricing power. Moderate-to-strong pricing power (the ASIC cost/performance edge + SASE/SecOps growth); a value-leader in network security.

Role in the AI stack. The network-security (custom-silicon firewall) layer.

Connected companies

• Palo Alto Networks (PANW) — FTNT competes with: Network security / firewalls / SASE (Palo Alto vs Fortinet)
• Zscaler (ZS) — FTNT competes with: SSE/SASE — Zscaler vs FortiSASE (Gartner SSE MQ top)
• CrowdStrike (CRWD) — FTNT competes with: Falcon vs FortiEDR/FortiXDR overlap in endpoint, but Fortinet is a small EDR player vs CrowdStrike's leadership — marginal rivalry
• Cisco Systems (CSCO) — FTNT competes with: cybersecurity — Cisco (Splunk/SASE/Hypershield) vs FTNT
• Broadcom (AVGO) — FTNT competes with: cybersecurity — Broadcom (Symantec endpoint/DLP) partially overlaps Fortinet (network firewalls/SASE); adjacent, not head-to-head

Others in Cybersecurity

• Palo Alto Networks (PANW)
• CrowdStrike (CRWD)
• Zscaler (ZS)
• Akamai Technologies (AKAM)

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