Cisco Systems (NASDAQ:CSCO) Shares Down 2.1% - Time to Sell?

Key Points

• Cisco shares fell 2.1% to $107.74, while trading volume was 32% below the average session level. Despite the decline, analysts maintain a “Moderate Buy” consensus with an average price target of $129.68.
• AI and cybersecurity initiatives remain key growth drivers. New Splunk AI capabilities and an expanded NVIDIA partnership could accelerate enterprise AI adoption, although Cisco faces competition from Datadog and CrowdStrike and must deliver sustained AI growth to support its valuation.
• Cisco’s latest quarter exceeded expectations, with revenue up 17.6% year over year to $17.25 billion and EPS of $1.22 versus the $1.17 consensus estimate. The company also declared a quarterly dividend of $0.42 per share, representing a 1.6% annualized yield.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report)'s stock price traded down 2.1% on Wednesday . The stock traded as low as $107.55 and last traded at $107.74. Approximately 15,508,139 shares traded hands during mid-day trading, a decline of 32% from the average session volume of 22,662,721 shares. The stock had previously closed at $110.07.

Trending Headlines about Cisco Systems

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

• Positive Sentiment: Splunk AI expansion strengthens Cisco’s growth narrative. Cisco introduced on-premises Splunk AI capabilities, including the Cisco AI POD for Splunk, allowing customers to run, secure and monitor AI workloads where their data resides. A new Tokenomics product will track AI spending and coding-agent usage, potentially improving customer adoption and demonstrating measurable returns. Cisco Delivers Trusted AI at Scale Through New Splunk Advancements
• Positive Sentiment: Expanded NVIDIA collaboration could accelerate enterprise AI adoption. Cisco and NVIDIA are extending their partnership to bring agentic AI, real-time cost tracking and AI-driven security automation to Splunk customers. The developments support Cisco’s goal of substantially increasing AI-related revenue and improve its positioning against Datadog and CrowdStrike. Cisco and Nvidia Expand Partnership
• Positive Sentiment: Management continues to emphasize cybersecurity demand. President and Chief Product Officer Jeetu Patel said security systems and regulatory guardrails must keep pace with increasingly capable AI threats, highlighting a potentially large market for Cisco’s security, observability and networking offerings. Cisco President Discusses AI Security
• Neutral Sentiment: Longer-term technology initiatives add strategic optionality. Cisco joined Verizon’s 6G Innovation Forum and is researching distributed quantum networking with Infleqtion. These efforts may broaden future opportunities but are unlikely to materially affect near-term earnings. Cisco Takes a Formal Role in 6G and Quantum Networking
• Negative Sentiment: Competitive and execution concerns remain. Investors are questioning Cisco’s campus-refresh strategy while Datadog and CrowdStrike continue expanding competing observability and cybersecurity products. At a relatively elevated earnings multiple, Cisco may need sustained AI growth to justify its valuation.
• Negative Sentiment: Small insider sales provide a modest sentiment headwind. Executives Oliver Tuszik and Thimaya Subaiya sold shares, although both transactions were conducted under pre-arranged Rule 10b5-1 plans and represented less than 1% of their respective holdings. Cisco Insider Sales

Analyst Upgrades and Downgrades

CSCO has been the topic of several research analyst reports. Rosenblatt Securities boosted their price target on shares of Cisco Systems from $150.00 to $165.00 and gave the company a "buy" rating in a research report on Thursday, August 13th. Truist Financial lifted their price objective on Cisco Systems from $125.00 to $140.00 and gave the company a "buy" rating in a research report on Thursday, August 13th. Zacks Research downgraded Cisco Systems from a "strong-buy" rating to a "hold" rating in a report on Tuesday, August 4th. HSBC cut Cisco Systems from a "buy" rating to a "hold" rating and lowered their target price for the company from $137.00 to $120.00 in a research note on Friday, August 14th. Finally, KeyCorp increased their price objective on Cisco Systems from $130.00 to $135.00 and gave the stock an "overweight" rating in a report on Thursday, August 13th. Two investment analysts have rated the stock with a Strong Buy rating, sixteen have given a Buy rating and seven have issued a Hold rating to the company. Based on data from MarketBeat, Cisco Systems currently has a consensus rating of "Moderate Buy" and a consensus price target of $129.68.

Cisco Systems Stock Performance

The firm has a market cap of $424.77 billion, a P/E ratio of 32.26, a P/E/G ratio of 2.29 and a beta of 1.00. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.79 and a current ratio of 0.93. The business's 50-day simple moving average is $113.54 and its 200 day simple moving average is $103.93.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last released its quarterly earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share for the quarter, beating the consensus estimate of $1.17 by $0.05. Cisco Systems had a return on equity of 30.16% and a net margin of 20.95%.The firm had revenue of $17.25 billion for the quarter, compared to analysts' expectations of $16.84 billion. During the same period in the prior year, the firm earned $0.99 EPS. The company's revenue was up 17.6% compared to the same quarter last year. 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. As a group, equities analysts predict that Cisco Systems, Inc. will post 4.43 earnings per share for the current year.

Cisco Systems Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Wednesday, October 21st. Shareholders of record on Friday, October 2nd will be paid a dividend of $0.42 per share. This represents a $1.68 dividend on an annualized basis and a dividend yield of 1.6%. The ex-dividend date is Friday, October 2nd. Cisco Systems's payout ratio is currently 50.30%.

Insider Activity

In related news, EVP Deborah L. Stahlkopf sold 6,487 shares of the business's stock in a transaction that occurred on Friday, August 14th. The shares were sold at an average price of $111.53, for a total transaction of $723,495.11. Following the completion of the sale, the executive vice president directly owned 167,116 shares in the company, valued at approximately $18,638,447.48. The trade was a 3.74% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Oliver Tuszik sold 680 shares of the company's stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $110.18, for a total transaction of $74,922.40. Following the sale, the executive vice president directly owned 163,337 shares of the company's stock, valued at approximately $17,996,470.66. This represents a 0.41% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 44,869 shares of company stock worth $5,005,620. Company insiders own 0.01% of the company's stock.

Institutional Investors Weigh In On Cisco Systems

Hedge funds and other institutional investors have recently modified their holdings of the stock. BlackRock Inc. bought a new position in shares of Cisco Systems in the second quarter worth about $42,129,647,000. Invesco Ltd. grew its stake in shares of Cisco Systems by 11.6% during the 4th quarter. Invesco Ltd. now owns 59,836,782 shares of the network equipment provider's stock valued at $4,609,227,000 after acquiring an additional 6,224,062 shares during the period. Norges Bank purchased a new stake in Cisco Systems in the 4th quarter worth approximately $4,473,272,000. Auto Owners Insurance Co increased its holdings in Cisco Systems by 8,718.3% in the 4th quarter. Auto Owners Insurance Co now owns 51,952,421 shares of the network equipment provider's stock worth $400,190,000 after acquiring an additional 51,363,281 shares in the last quarter. Finally, Franklin Resources Inc. raised its stake in Cisco Systems by 18.0% during the 4th quarter. Franklin Resources Inc. now owns 50,320,905 shares of the network equipment provider's stock worth $3,876,219,000 after acquiring an additional 7,679,422 shares during the period. 73.33% of the stock is currently owned by hedge funds and other institutional investors.

About Cisco Systems

Cisco Systems, Inc is a global technology company that provides networking, cybersecurity, collaboration, observability and other information technology solutions. Its offerings include routers, switches, wireless networking equipment, data center infrastructure, security platforms, unified communications tools and software designed to help organizations connect, manage and protect their digital environments.

Cisco serves businesses, government agencies, educational institutions, telecommunications providers and other organizations worldwide.

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