What Happened?
Shares of application security provider F5 (NASDAQ: FFIV) fell 3.4% in the afternoon session after it reversed gains from the previous day that were driven by the announcement of a new acquisition.
The decline follows news that F5 has agreed to acquire CalypsoAI, a software startup focused on securing artificial intelligence applications, for $180 million in cash. This strategic move aims to bolster F5's security portfolio by adding a protective layer for AI systems against threats like data theft. While the market initially reacted positively to the deal on Thursday, pushing F5's stock to an all-time high, Friday's session suggests investors may be taking profits after the rally or re-evaluating the financial impact of the cash purchase.
The shares closed the day at $321.67, down 3.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy F5? Access our full analysis report here, it’s free.
What Is The Market Telling Us
F5’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 2.3% on the news that the company announced its intent to acquire enterprise AI security firm CalypsoAI for $180 million.
The deal, primarily financed with cash, aims to bolster F5's security offerings as artificial intelligence redefines the corporate attack surface. CalypsoAI is described as a pioneer in enterprise AI security, providing real-time threat defense and data security for companies deploying generative AI. F5 plans to integrate CalypsoAI's award-winning platform into its own Application Delivery and Security Platform (ADSP). This move will create a more complete solution for securing AI applications and models, giving enterprises the confidence to innovate faster. The acquisition is expected to close in F5's fourth fiscal quarter, which ends on September 30, 2025.
F5 is up 27.8% since the beginning of the year, and at $321.67 per share, it is trading close to its 52-week high of $334.59 from September 2025. Investors who bought $1,000 worth of F5’s shares 5 years ago would now be looking at an investment worth $2,644.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
