11 Cyber Stocks Fared Worse Than the Nasdaq Thursday After Trump Announced Tariffs
Cybersecurity vendors took the Thursday stock market sell-off hard, with Cloudflare, Fortinet and SailPoint experiencing significant price drops after U.S. President Donald Trump announced higher-than-expected tariffs.
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The Nasdaq Composite Index was down nearly 5.3% Thursday following Trump announcing a new 10% baseline tariff on all imports as well as additional, country-specific taxes on goods from a host of other countries. The bleeding has been nearly as bad in cybersecurity, with 11 publicly traded cybersecurity firms faring worse than the Nasdaq while 12 companies fared better, although all saw their stock drop.
The country-specific measures include increasing total tariffs on Chinese imports to 54%, a 20% tariff on goods coming from the European Union and 24% on Japanese imports. The market reaction suggested that the scale of the tariffs on Wednesday had come as a surprise, with the tariff calculations including adjustments for alleged currency manipulation as well as other taxes.
“The numbers are shockingly high compared to what people were expecting and it is inexplicable in many ways,” Peter Tchir, head of macro strategy at Academy Securities, told The New York Times. “I think it’s a disaster.”
Thursday’s sell-off was just the 17th time in its 129-year history that the Dow Jones Industrial Average fell by more than 1,000 points in a single day. It was down 1,576 points as of Thursday afternoon.
Cloudflare, Fortinet, SailPoint Stocks Hit Hard in Sell-Off
No major cybersecurity company fared worse than San Francisco-based Cloudflare. The firm’s stock fell 9.82% to $107.79 per share as of mid-afternoon Thursday, which is the lowest the company’s stock has traded since Dec. 31, 2024. Cloudflare derived 49% of its revenue last year from customers outside the United States, with 49.97% of Cloudflare’s property and equipment located outside the United States.
“We generally rely on a limited number of suppliers for the servers that we use in our network, and we ordinarily purchase these components on a purchase-order basis, without any long-term contracts guaranteeing supply,” Cloudflare wrote in a regulatory filing in February. “We may also be subject to price increases from these suppliers should they be negatively impacted by tariffs or other regulations.”
The second-worst major stock performance came from Silicon Valley-based Fortinet, whose stock was down 7.72% to $90.51 per share, the lowest the company’s stock has traded since Nov. 7, 2024. Some 70% of Fortinet’s workforce is based outside the United States, including 20% in Canada. The company additionally has data center, PoP, support functions and R&D taking place across 680,000 square feet in Canada.
“If the United States expands increased tariffs, or retaliatory trade measures are taken by other countries in response to the tariffs, the cost of our products could increase, our operations could be disrupted or we could be required to raise our prices, which may result in the loss of customers and harm to our reputation and operating performance,” Fortinet wrote in a regulatory filing in February.
Also affected by the plunge is Austin-based SailPoint, which experienced an 8.63% drop in stock price to $17.32 per share, the lowest the firm’s stock has traded since going public in February. SailPoint in 2024 generated 32% of its revenue from outside the United States and the firm has a major R&D footprint across India, Mexico, Israel, the United Kingdom and Canada.
“We have in the past experienced longer sales cycles and related negotiations for prospective customers and existing customer expansions, reduced contract sizes, or generally increased scrutiny on technology spending and budgets from existing and potential customers, due in part to the effects of macroeconomic uncertainty,” SailPoint wrote in a regulatory filing in March.
Other cybersecurity firms whose stock fared worse than the Nasdaq Thursday include Hub Security, Commvault, Rubrik, Rapid7, Zscaler, Radware, OneSpan and CrowdStrike. Conversely, the 12 companies that outperformed the Nasdaq Thursday include Tenable, Okta, Palo Alto Networks, CyberArk, SentinelOne, Qualys, Akamai, Gen Digital, Varonis, CISO Global, Trend Micro and Check Point Software.
The U.S. tariff rate on all imports is now around 22%, up from 2.5% in 2024, Olu Sonola, the head of U.S. economic research at Fitch Ratings, told The New York Times. That rate was last seen around 1910, he said. Prior to this week, Trump had previously announced, delayed, changed and ultimately imposed tariffs on Canada, Mexico, steel, aluminum, cars and auto parts.
“Trump is going to war with countries on this,” Andrew Brenner, head of international fixed income at National Alliance Securities, told The New York Times. “It’s ridiculous. It shows no comprehension as to what he is doing to other countries. And it is going to hurt the U.S.”