Fortinet (FTNT) shares traded sharply lower on Wednesday, falling as much as 3.4 percent in early trading before closing down 2.9 percent at 12:27 p.m. ET, driven by news of OpenAI's potential entry into cybersecurity.
OpenAI entered preliminary talks to acquire Trail of Bits, a privately held security research firm, according to The Information. Trail of Bits specializes in identifying and securing vulnerabilities within open-source software.
OpenAI and Trail of Bits have worked together before. Several months ago, they launched the "Patch the Planet" initiative to identify and secure exploitable vulnerabilities in open-source software. During its first week, the program exposed hundreds of security issues and created fixes for them.
The market reaction reflects investor fears that AI could displace existing software offerings. Similar concerns triggered a sell-off in software-as-a-service stocks at the beginning of 2026 following Anthropic's Claude model debut. Those stocks have since recovered as investors recognized many services are not easily replaced by AI alone.
Fortinet stock has gained 120 percent this year, but the high valuation—54 times forward earnings and 49 times next year's expected earnings—makes it sensitive to negative headlines. The stock remains up over 11,000 percent since its late-2009 IPO.
