Chip Stock Investor on $FTNT (Oct 26, 2026)
FTNT is differentiated rather than superior: its custom secure processing unit and hardware infrastructure layer make it a physical-asset business, with over 60% of revenue from services that land because the infrastructure is installed first, and a hardware-driven sales cycle that gets it valued differently from software peers. The speaker owns it in a basket with Palo Alto and CrowdStrike, sees no formidable publicly traded competitor today, and likes the differentiation for diversification.
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DTAB, what are your thoughts on Forinet custom processors? Is there a potential competitor that would try the Fordinet model? Ah, yes, the secure processing unit. I love that. I love that.
That was something that you could not find on the internet outside of Forinet's annual filings until a few years ago when this weird little duo on YouTube started talking about the SPU.
Uh will anybody try to emulate the model? I don't um Yes. I think I think that is in the beginning early stages. I think there are some startups that are starting to address cyber security again from the infrastructure layer.
Forinet doesn't really have a formidable publicly traded competitor I would say uh that we would be seriously interested in investing in today.
And Dub has a followup. Which would you consider more superior? Forinet, PaloAlto, Crowd, I'm biased, but it seems forinet seems like the superior one because of that infrastructure layer.
I mean, we own we own all of the above as a basket. And I I don't know that you can compare them really. They're so different uh at this point. the business models are are are different enough that that they they address different parts of the cyber security industry.
Fordinet very much uh um a physical assetbased business even though 60% of the revenue plus 60% plus is tied to services those services land for the business because the infrastructure gets installed in the first place for the most part.
So I would say it's a differentiated asset. I wouldn't say it necessarily superior, just a differentiated asset. It's also one of the reasons why it gets valued a bit differently because it's a hardwarebased business.
There is uh a different sales cycle involved than the softwaredriven companies. It's software driven peers.
So that's our take. We would say not necessarily superior but very much differentiated which we like a lot. We love differentiated assets because if you want diversification in your portfolio, you don't want everything going up and down at the same time together.
That's diversification. You just have a messy portfolio with all of the problems of being fullported into, you know, too few stocks. So, we we like forinet for that reason.