Fortinet Shares Plummets 2.34% Amid Fraud Probe as Earnings Woes and Weak Guidance Trigger SellOffVolume Ranks 84th

Fortinet (FTNT) shares declined 2.34% on August 21, 2025, with a trading volume of $0.77 billion, ranking 84th in market activity. The stock faces renewed scrutiny following a securities fraud investigation launched by Glancy Prongay & Murray LLP. The probe centers on Fortinet’s second-quarter 2025 earnings report, which revealed the company was approximately 40%-50% through its 2026 firewall upgrade cycle and issued weaker-than-expected revenue guidance of $1.67 billion to $1.73 billion for the upcoming quarter. This disclosure triggered a 22% drop in stock price on August 7, prompting investor lawsuits and regulatory inquiries.

While the firm announced product enhancements to its FortiRecon platform and positive analyst upgrades, these developments were overshadowed by concerns over execution risks. A critical analysis highlighted missteps in growth strategy and sustainability, further weighing on sentiment. Meanwhile, DZ Bank upgraded its rating for FTNT, reflecting optimism around annual recurring revenue growth and billings acceleration. However, recent analyst downgrades and bearish forecasts from major institutions underscored lingering uncertainty about near-term performance.

A strategy of purchasing the top 500 stocks by daily trading volume and holding for one day from 2022 to present yielded a 6.98% compound annual growth rate during the backtest period. The approach experienced a maximum drawdown of 15.59%, with a notable decline in mid-2023 underscoring the need for robust risk management even in diversified strategies.