Here's What Pressured Fortinet (FTNT) in Q3

Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. The Mid Cap Composite returned -3.2% net-of-fees in the third quarter, compared to a 2.8% gain for the Russell Midcap Growth Index. The strategy’s focus on high-quality, profitable companies struggled to keep pace in the quarter amid risk-on dominance. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Fortinet, Inc. (NASDAQ:FTNT). Fortinet, Inc. (NASDAQ:FTNT) is a global provider of cybersecurity and convergence of networking and security solutions. The one-month return of Fortinet, Inc. (NASDAQ:FTNT) was -0.57%, and its shares gained 2.84% of their value over the last 52 weeks. On October 21, 2025, Fortinet, Inc. (NASDAQ:FTNT) stock closed at $84.78 per share, with a market capitalization of $64.964 billion.

Conestoga Capital Advisors stated the following regarding Fortinet, Inc. (NASDAQ:FTNT) in its third quarter 2025 investor letter:

"Fortinet, Inc. (NASDAQ:FTNT) is the worldwide market share leader in network security firewalls (by units). During the quarter, the company posted solid results, but also said they were much further along the refresh cycle than investors were expecting. This resulted in significant share pressure as revenue growth estimates for 2026 and 2027 were revised lower."

Fortinet, Inc. (NASDAQ:FTNT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 46 hedge fund portfolios held Fortinet, Inc. (NASDAQ:FTNT) at the end of the second quarter, compared to 62 in the previous quarter. While we acknowledge the potential of Fortinet, Inc. (NASDAQ:FTNT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Fortinet, Inc. (NASDAQ:FTNT) and shared the list of most profitable software stocks to invest in. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.