Software Stocks Are Getting Crushed Again After Hours
Fortinet (FTNT) and ServiceNow (NOW) fell 25.71% and 18.13% after hours despite beating revenue estimates. Fortinet's services growth slowed, while ServiceNow's cRPO guidance disappointed. Other software stocks also declined. Microsoft (MSFT) rose 2.90% after its earnings report. Both companies reported September-quarter results, with Fortinet raising its full-year revenue outlook.
How this was made
The 30-second read
Why it matters
The earnings surprise and guidance cuts dominate short‑term price action, while the broader software sector may experience heightened volatility.
Market read
Earnings-driven price moves in two mega‑cap software stocks signal potential continuation of the sector decline, relevant for traders with exposure to tech ETFs and related names.
What to watch
Billings growth remains strong, suggesting underlying demand may sustain longer than the guidance cut implies.
Background
Two leading SaaS firms released September earnings after market close, both beating revenue estimates but providing weaker forward guidance, triggering a sector‑wide sell‑off.
Ticker impact
Fortinet reported September-quarter results, beat revenue estimates but cut full-year service revenue guidance, causing a 25.7% after‑hours drop.
likely further downside as investors digest weaker services outlook.
Guidance cut on a major revenue line for a large‑cap software firm that just saw a sharp price drop.
ServiceNow posted September-quarter results, missed EPS consensus and lowered December‑quarter cRPO guidance, leading to an 18.1% after‑hours decline.
likely continued weakness until guidance clarity improves.
Guidance miss on a key forward metric for a mega‑cap SaaS company that moved sharply lower.
Market effects
The sell‑off may spread to other software and cybersecurity stocks, reinforcing a broader sector pullback.
U.S. tech‑heavy indices could see modest downside pressure in early trading.
Limited to markets with significant exposure to U.S. software equities.
Counterpoint
If services revenue rebounds faster than expected, FTNT could recover quickly, offering a short‑term buying opportunity.
Key entities
- companyFortinet
Cybersecurity firm with large‑cap market cap, reported earnings and guidance cut.
- companyServiceNow
Enterprise software provider, reported earnings and lowered cRPO guidance.
