F5 Plunges 19%, Worst Day Since 2013, as AI Spending Squeezes Margins
FFIV sits 64% above its 52-week low of $223.76 on elevated volume (3.3× avg).
Summary
F5 beat across the board for fiscal Q4 — adjusted EPS of $4.42 on $917 million in revenue versus $4.26 and $884 million expected — and guided fiscal 2027 revenue growth of 8% to 9%, above the 6.6% consensus. The stock still fell 19% to $373.03, its worst single-day drop since April 5, 2013, and the worst performer in the S&P 500. The problem is the profit outlook: fiscal 2027 EPS guidance of $18.00 to $18.30 implies subdued growth, and operating expenses already ran hot at $462 million versus $440 million expected, driven by sales and marketing. J.P. Morgan flags two squeezes — higher hardware component costs and a plan to double dedicated AI security salespeople in 2027 plus incentives for all field sellers to pitch AI security, spending that lands before the revenue does. Current AI revenue is mostly traditional traffic-routing into GPU clusters, not the high-margin AI security software. Bulls point to direct AI-use bookings above $100 million in fiscal 2026, up 300% year over year; J.P. Morgan keeps Overweight with a $515 target and Evercore raised its target to $500 from $475. This follows the 8-K and earnings release filed October 27th, which also disclosed a $1.5 billion buyback.
At the time of this announcement, FFIV was trading at $366.18 on NASDAQ in the Technology sector, with a market capitalization of approximately $20.7B. The 52-week trading range was $223.76 to $483.30. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.