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Cyber threats are becoming harder to defend against as AI systems take on a more active role in attacks. OpenAI recently said its technology independently hacked another company in an unprecedented incident, underscoring the rapid pace in which the cyberthreat is evolving.
That makes next-generation hardware defenses more relevant, and Fortinet’s (FTNT) July 21, 2026 collaboration with Intel (INTC) fits squarely into that shift. The companies are developing the Fortinet Security Processor 6, or SP6, by combining Fortinet’s security ASIC expertise with Intel’s advanced manufacturing.
The deal also comes as Fortinet keeps delivering strong operating momentum. In Q1 2026, revenue rose 20% year-over-year (YOY) to $1.85 billion, as the company has been expanding its AI-focused security platform.
So the real question is simple. Does this Intel tie-up just reinforce Fortinet’s hardware story, or does it actually become a meaningful catalyst for the stock?
Fortinet’s Premium Valuation
Fortinet is based in Sunnyvale, California and makes cybersecurity hardware and software that protect enterprise networks, cloud traffic, and data centers. It serves companies looking for stronger threat protection, faster performance, and better control across modern digital systems.
The company now has a market cap of $115.83 billion and is up 95.9% year-to-date (YTD) and 48.4% over the past 52 weeks.
That move has left FTNT priced at 61.30 times trailing price-to-earnings and 56.71 times forward price-to-earnings, both above the sector medians of 34.24 times and 32.46 times.
Released on May 6, its Q1 2026 results help explain the reason investors are still paying up. Revenue rose 20% YOY to $1.85 billion, product revenue climbed 41% to $645 million, and billings increased 31% to $2.09 billion.
Margins stayed strong too. GAAP operating margin came in at 31%, while non-GAAP operating margin reached 36%. GAAP EPS rose 29% to $0.72, and non-GAAP EPS climbed 41% to $0.82.
Also, Fortinet reported net income of $534.5 million, up 5.63% from $506 million in the prior period. It added record operating cash flow of $1.08 billion and free cash flow of $1.01 billion.
Fortinet’s Intel Deal Could Strengthen Its ASIC Edge
Fortinet and Intel are working together on Fortinet Security Processor 6, or SP6, with Intel handling the design, packaging, and manufacturing side. Intel said the chip will be built on Intel 4, which makes Fortinet the first named cybersecurity customer for Intel Foundry and the first external customer on that node. Fortinet said the project should speed up development and strengthen its supply chain, making it less exposed.
Fortinet has been building its AI security plan in layers. FortiEndpoint was updated to help companies govern AI use, protect sensitive data, and keep endpoint security and secure access in one place. Fortinet said the aim is to make endpoint protection simpler, with one agent, one console, and one license doing most of the work.
The company then moved that same idea into its security operations platform. FortiSOC was launched as a unified SOC platform built around agentic AI, with log handling, correlation, automation, case management, and investigations all in one cloud service. Fortinet said the platform is meant to reduce tool sprawl and help teams respond faster inside a single Security Fabric setup.
Fortinet’s work with Nvidia Corporation (NVDA) fits the same pattern. The company deepened that integration to help secure enterprise AI at scale, which ties its AI protection story closer to the workloads businesses are actually running.
Taken together, the message is simple. Fortinet is trying to keep its hardware, endpoint security, and AI protection tied together in one platform.
Analyst Expectations Remain Cautious
Fortinet’s next earnings release is scheduled for July 29 after the close, and that date is now the main near-term check on the stock. For the current quarter ending June 2026, Wall Street expects $0.66 per share, up from $0.58 in the prior year. That works out to 13.79% YOY growth.
One recent call helped the stock a bit. Ellie Kearney of Arete upgraded Fortinet to “Buy” from “Neutral” on April 27 and raised the target to $104. That is still 34% below the current share price, but it shows at least one analyst sees more room for the story to work.
Sentiment remains guarded. The consensus rating on Fortinet is “Hold,” based on 43 analysts, and the average price target is $124.61. That target implies 19.7% downside from its current price.
Conclusion
Fortinet’s Intel deal is a good story, but the stock still has to prove itself with the next earnings report. If the numbers are solid, FTNT can hold up well, but if they disappoint, the market may lose patience quickly. Most likely, the shares keep a mild upward drift rather than making a big jump. The partnership helps, but earnings will decide how far this can go.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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