Fortinet stock tumbled as much as 20% on Thursday after the release of the company's Q3 results. Other cybersecurity stocks were also dragged lower. CrowdStrike, Okta, and Palo Alto Networks all declined more than 2%.

The broader software sector also declined on Thursday, led by ServiceNow shares, after the company's fourth quarter bookings outlook fell just short of estimates, rekindling fears that AI competition could pressure its software business.

Atlassian fell 7%; Workday fell 6%; Asana, Salesforce, Twilio, and HubSpot rose 4%; Datadog, Cloudflare, Oracle, Zscaler, Figma, and Zoom fell 3%.

Fortinet's third quarter results beat estimates, but its full-year service revenue forecast was lowered to $5.15 billion to $5.17 billion, down from its previous guidance of $5.18 billion to $5.22 billion and below Wall Street estimates of $5.2 billion, according to Bloomberg data.

"Fortinet's cut to service revenue guidance implies lower attach rates from bundled networking and secure access service edge offerings on its firewall platform," noted Bloomberg Intelligence analysts.

Following the results, Wall Street analysts lowered their valuations on the stock, with BofA cutting Fortinet to Neutral and setting a price target of $140 per share.

Mizuho Securities decreased its price target from $160 to $118, while Piper Sandler analysts slashed their target from $175 to $140.