Cisco Systems (NASDAQ:CSCO) Shares Down 1.6% - Should You Sell?

Key Points

• Cisco delivered strong results, with fiscal fourth-quarter revenue of about $17.3 billion, up 18% year over year, and non-GAAP EPS of $1.22 versus the $1.17 consensus estimate. Networking orders rose 40%, driven by data-center and AI demand.
• AI infrastructure is emerging as a major growth driver: Cisco booked $9.3 billion in hyperscaler AI orders in fiscal 2026 and expects roughly $7.5 billion in related revenue in fiscal 2027. Its fiscal 2027 revenue and EPS guidance also exceeded Wall Street expectations.
• The main risks are margin pressure and high expectations, as lower-margin hardware makes up more of the AI business. HSBC downgraded the stock to Hold and lowered its target to $120, although the broader analyst consensus remains Moderate Buy with an average target of $129.43.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) dropped 1.6% during mid-day trading on Friday . The company traded as low as $110.06 and last traded at $111.68. Approximately 29,341,910 shares were traded during trading, an increase of 23% from the average daily volume of 23,770,551 shares. The stock had previously closed at $113.47.

Key Headlines Impacting Cisco Systems

Here are the key news stories impacting Cisco Systems this week:

• Positive Sentiment: Cisco reported record fiscal fourth-quarter revenue of approximately $17.3 billion, up 18% year over year, while non-GAAP EPS of $1.22 exceeded the $1.17 consensus estimate. Networking product orders rose 40%, reflecting strong data-center and AI demand. Cisco fiscal 2026 earnings release
• Positive Sentiment: AI momentum remains a major growth catalyst: Cisco booked $9.3 billion of AI infrastructure orders from hyperscalers in fiscal 2026 and expects approximately $7.5 billion of related revenue in fiscal 2027. Cisco AI networking supercycle
• Positive Sentiment: Fiscal 2027 guidance topped Wall Street expectations, with revenue forecast at $72.2 billion-$73.4 billion and non-GAAP EPS at $5.05-$5.11. Several firms, including UBS, Wells Fargo and Rosenblatt, raised their price targets and maintained bullish ratings.
• Neutral Sentiment: Cisco declared a quarterly dividend of $0.42 per share, payable October 21 to shareholders of record October 2, providing continued income support for investors.
• Negative Sentiment: The central concern is margin pressure. AI growth is arriving primarily through hardware, which carries lower product margins and could dilute profitability as the sales mix shifts toward large infrastructure deployments. Cisco AI hardware margin analysis
• Negative Sentiment: HSBC downgraded CSCO to Hold from Buy and cut its price target to $120 from $137, citing a lack of near-term catalysts despite strong results. Investors also appear to have expected an even more aggressive outlook after Cisco’s substantial rally. HSBC Cisco rating cut

Analyst Upgrades and Downgrades

Several brokerages have weighed in on CSCO. CICC Research boosted their price target on Cisco Systems from $96.00 to $125.00 and gave the company an "outperform" rating in a report on Monday, May 18th. The Goldman Sachs Group lifted their price objective on Cisco Systems from $116.00 to $125.00 and gave the company a "neutral" rating in a research report on Wednesday, June 3rd. Barclays increased their target price on Cisco Systems from $121.00 to $123.00 and gave the stock an "equal weight" rating in a research report on Thursday. Weiss Ratings raised Cisco Systems from a "buy (b-)" rating to a "buy (b)" rating in a research note on Friday, May 29th. Finally, Bank of America upped their price objective on shares of Cisco Systems from $135.00 to $150.00 and gave the company a "buy" rating in a research note on Monday, June 8th. One equities research analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and seven have issued a Hold rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $129.43.

Cisco Systems Price Performance

The company's 50 day moving average price is $117.23 and its 200-day moving average price is $99.00. The company has a market capitalization of $440.18 billion, a PE ratio of 33.44, a PEG ratio of 2.79 and a beta of 1.02. The company has a current ratio of 0.92, a quick ratio of 0.81 and a debt-to-equity ratio of 0.40.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last issued its earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share for the quarter, topping the consensus estimate of $1.17 by $0.05. Cisco Systems had a return on equity of 30.54% and a net margin of 20.95%.The business had revenue of $17.25 billion for the quarter, compared to analyst estimates of $16.84 billion. During the same period last year, the company posted $0.99 EPS. The business's quarterly revenue was up 17.6% on a year-over-year basis. Cisco Systems has set its FY 2027 guidance at 5.050-5.110 EPS and its Q1 2027 guidance at 1.320-1.340 EPS. On average, sell-side analysts forecast that Cisco Systems, Inc. will post 4 earnings per share for the current fiscal year.

Cisco Systems Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, October 21st. Shareholders of record on Friday, October 2nd will be given a dividend of $0.42 per share. This represents a $1.68 dividend on an annualized basis and a yield of 1.5%. The ex-dividend date of this dividend is Friday, October 2nd. Cisco Systems's payout ratio is 54.55%.

Insider Activity at Cisco Systems

In other Cisco Systems news, EVP Oliver Tuszik sold 2,607 shares of the stock in a transaction that occurred on Thursday, June 11th. The shares were sold at an average price of $121.12, for a total value of $315,759.84. Following the completion of the sale, the executive vice president owned 172,727 shares of the company's stock, valued at $20,920,694.24. This trade represents a 1.49% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thimaya K. Subaiya sold 7,127 shares of the firm's stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $119.91, for a total transaction of $854,598.57. Following the sale, the executive vice president directly owned 140,857 shares of the company's stock, valued at approximately $16,890,162.87. The trade was a 4.82% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 31,134 shares of company stock worth $3,739,000. 0.01% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Cisco Systems

Several hedge funds and other institutional investors have recently bought and sold shares of the business. BlackRock Inc. acquired a new position in Cisco Systems during the 2nd quarter worth $42,129,647,000. Norges Bank bought a new position in shares of Cisco Systems during the fourth quarter valued at approximately $4,473,272,000. Auto Owners Insurance Co increased its position in Cisco Systems by 8,718.3% in the fourth quarter. Auto Owners Insurance Co now owns 51,952,421 shares of the network equipment provider's stock worth $400,190,000 after buying an additional 51,363,281 shares during the period. Bank of New York Mellon Corp bought a new stake in Cisco Systems in the 2nd quarter valued at about $4,714,574,000. Finally, Deutsche Bank AG acquired a new position in shares of Cisco Systems during the second quarter worth approximately $1,997,004,000. 73.33% of the stock is currently owned by hedge funds and other institutional investors.

Cisco Systems Company Profile

Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.

In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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