ServiceNow and Fortinet Fall 24.3%, Lilly Rises 7.7% in Opening Snapshot
Key Facts
ServiceNow and Fortinet shares each fell 24.3%, while Eli Lilly rose 7.7% in a snapshot taken near the market open at about 9:50 a.m. Eastern time on October 29. The snapshot put ServiceNow at $113.70 and Fortinet at $131.87, versus $1,387.74 for Lilly. The moves followed the companies’ third-quarter results and outlooks for coming periods. Lilly’s revenue rose sharply, while ServiceNow and Fortinet reported revenue growth and signs of demand. But investors reacted sharply to the two companies’ fourth-quarter forecasts as they monitored a slowdown in some growth indicators and the risk that artificial intelligence could disrupt software business models.
Lilly said third-quarter revenue rose 39% to $24.397 billion, driven mainly by Mounjaro and Zepbound. Global Mounjaro revenue was $10.723 billion, up 65% year over year, while U.S. Zepbound revenue reached $5.352 billion, an increase of 49%. Chief Executive David Ricks said revenue growth was driven by “broad global demand for Mounjaro and Zepbound, the global launch of Foundayo, and expanded U.S. coverage for obesity care.” Third-quarter revenue also included about $900 million in benefits, including $410 million in Jardiance-related milestone payments. These drivers and benefits help explain the strength of quarterly revenue, while their effect differs from that of expenses on earnings per share.
Lilly reported third-quarter earnings per share of $7.22 on a GAAP basis and $7.48 on a non-GAAP basis. Both figures included $4.57 per share in acquired in-process research and development expenses, compared with $0.71 in the third quarter of 2025. The company raised its 2026 revenue forecast range to $91–92 billion, from $85–87 billion. By contrast, it cut its non-GAAP earnings-per-share forecast to $35–36, from $35.50–36.50. The company said the underlying increase in its earnings forecast did not fully offset the effect of acquired in-process research and development expenses resulting from third-quarter business development activity. Its third-quarter results call was scheduled for October 29 at 10:00 a.m. Eastern time, and it also listed an Innovation Day on December 7, 2026.
By contrast, ServiceNow reported third-quarter subscription revenue of $3.988 billion, up 21% year over year, while total revenue rose 20.5% to $4.106 billion. Current remaining performance obligations stood at $13.65 billion, up 20.5%, while total obligations reached $29.7 billion, up 22%. The company reported GAAP operating income of $385 million and an operating margin of 9.5%. But it forecast fourth-quarter subscription revenue of between $4.245 billion and $4.255 billion and current remaining performance obligation growth of 18.5%. Investing.com said the stock fell more than 18% in premarket trading, with concerns focused on subscription growth and backlog; a Berenberg analyst said the fourth-quarter guidance appeared “extremely disappointing” to the market despite results topping expectations and an increase to annual guidance.
ServiceNow raised its 2026 annual contract value target for AI to $1.7 billion, up 70% from its level at the start of the year. It said customers’ year-to-date consumption of agentic AI in production environments had increased more than 13-fold year over year, and it raised its fiscal-year free cash flow margin target to 36%. These indicators put the expansion of its AI business alongside investor concerns about the effect of new models on traditional software businesses. Investing.com reported that several brokerages cut their price targets for the stock, citing concerns about subscription growth and backlog, as well as the fact that AI initiatives had yet to show an impact. The stock closed at $150.13 on October 28, before the drop in the snapshot the following day.
Fortinet’s quarterly revenue rose 20% to $2.08 billion, while billings increased 29% to $2.34 billion. GAAP earnings per share were about $0.86, and the operating margin was 34%. The company forecast 2026 revenue of between $8.125 billion and $8.215 billion, services revenue of between $5.150 billion and $5.170 billion, and billings of between $9.568 billion and $9.718 billion. For the fourth quarter, it forecast revenue of between $2.155 billion and $2.245 billion. Chief Executive Ken Xie said the company had “raised its 2026 billings guidance for the third time this year.” However, Investing.com noted that the stock had risen 119% since the start of the year and cited analysts’ concerns about slower services revenue growth; it also reported a 27% decline in premarket trading.
The selloff was not limited to the two stocks; the results reinforced investor concerns that new AI models could disrupt traditional business models in the software sector. Investing.com said analysts viewed the companies’ fourth-quarter guidance as disappointing to the market, despite results topping expectations and annual guidance being raised. Lilly closed at $1,288.3 on October 28, while ServiceNow was at $150.13 and Fortinet at $174.08 in the same session, before the next opening snapshot. Fortinet’s results call was scheduled for October 28 at 1:30 p.m. Pacific time, or 4:30 p.m. Eastern time. Lilly’s next listed event after its results call is Innovation Day on December 7, 2026.