Fortinet, Inc. (FTNT) Downgraded to Hold Despite Strong Q4 as Analysts Warn of Margin Pressures

Fortinet, Inc. (NASDAQ:FTNT) is one the Top 10 AI Stocks in Focus on Wall Street. Despite delivering fourth-quarter 2025 results that exceeded both market expectations and own guidance, Freedom Capital Markets analyst Almas Almaganbetov downgraded Fortinet (NASDAQ: FTNT) from Buy to Hold with a price target of $90.00 on February 17.

The firm flagged valuation constraints for FTNT despite Q4 outperformance, mainly due to margin risks from memory prices, FX volatility, and rising competition. It noted how FTNT’s robust results were propelled by the launch of a large-scale network equipment refresh cycle.

The service segment, it highlighted, also posted steady growth backed by expanding Unified SASE cloud solutions and integration of recent acquisitions. This is despite noting customer caution regarding contract durations.

The firm further pointed out that long term growth rates may face challenges from potential margin compression risks, which in turn come from rising memory prices, currency volatility and competitive pressures that are further intensifying.

We maintain our $90 price target for FTNT shares but are downgrading our recommendation from “Buy” to “Hold” given current valuation levels.

Fortinet, Inc. (NASDAQ:FTNT), a cybersecurity company, provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products.

While we acknowledge the potential of 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.

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