F5 stock suffers worst day in more than a decade as AI spending shakes investors
F5 Networks experienced its worst single-day stock performance in over 13 years, losing about $5 billion in market value. Despite beating Wall Street revenue and earnings estimates in its fiscal fourth quarter, the company's guidance for slower revenue growth (8-9% versus 11% current year) and lower profit margins spooked investors. F5 attributed the headwinds to increased investments in AI security sales personnel and rising hardware component costs. The company's guidance reflected a significant slowdown in its hardware replacement cycle.
Key points
- F5 stock fell ~20%, wiping out $5 billion in market value
- Company beat earnings but guided weaker fiscal 2027 growth (8-9%)
- Increased AI security spending and rising component costs pressure margins
- Hardware replacement cycle expected to cool from current pace
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