Cisco Systems (NASDAQ:CSCO) Stock Price Down 2.1% - Here's Why

Key Points

• Cisco shares fell 2.1% to $114.89 on lighter-than-average trading volume, despite the company’s fifth consecutive earnings beat and growing demand for AI infrastructure.
• Cisco’s AI-related growth prospects remain a key focus, with new agentic AI features, expanded collaboration partnerships, Supermicro’s entry into its AI factory channel and cybersecurity enhancements supporting the outlook.
• Investor sentiment is generally positive, with a consensus “Moderate Buy” rating and a $128.52 price target, but analysts caution that the stock’s valuation may already reflect substantial AI optimism and require sustained order growth.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) was down 2.1% on Thursday. The stock traded as low as $114.69 and last traded at $114.89. Approximately 12,947,872 shares changed hands during trading, a decline of 42% from the average daily volume of 22,498,871 shares. The stock had previously closed at $117.39.

Key Cisco Systems News

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

• Positive Sentiment: Cisco reported its fifth consecutive earnings beat, while demand for AI infrastructure and related orders continues to build. Investors are assessing whether this marks the beginning of a broader growth phase for the networking company. Cisco Could Be Entering a New Growth Phase
• Positive Sentiment: Cisco unveiled agentic AI features across Webex, workplace management and customer experience. The updates include Claude-powered Webex agents that can analyze data, create content and perform tasks using enterprise context, potentially supporting software and recurring-revenue growth. Cisco Unveils New Agentic Collaboration Experiences
• Positive Sentiment: A partnership with Google Meet for Cisco devices, a new customer-experience platform and the upcoming RoomOS 27 update broaden Cisco’s collaboration ecosystem and strengthen its positioning in enterprise AI-enabled communications. Cisco Unveils Agentic AI Tools
• Positive Sentiment: Supermicro servers entering Cisco’s AI factory channel could increase Cisco’s access to AI infrastructure deployments and create additional demand for its networking equipment. Cisco Stock and Supermicro AI Factory Channel
• Positive Sentiment: Cisco added a FIPS-validated post-quantum security application, reinforcing its cybersecurity portfolio and credibility with government and regulated-industry customers. Cisco Adds FIPS-Validated Security Application
• Neutral Sentiment: Analysts and investors remain divided over whether Cisco’s AI opportunity justifies its valuation. With the shares trading at a relatively demanding earnings multiple after a strong rally, further gains may require sustained order growth and execution.
• Negative Sentiment: The “wait” thesis argues that optimism around AI infrastructure may already be priced in, leaving limited near-term margin for error. Profit-taking or slower-than-expected conversion of AI orders could weigh on the stock even as the long-term outlook improves. The Case for Waiting on Cisco Stock

Wall Street Analyst Weigh In

Several research analysts have recently commented on the company. Weiss Ratings reaffirmed a "buy (b)" rating on shares of Cisco Systems in a research note on Wednesday, August 26th. Deutsche Bank Aktiengesellschaft started coverage on Cisco Systems in a research note on Tuesday, September 1st. They set a "buy" rating and a $135.00 price objective for the company. Morgan Stanley raised their target price on shares of Cisco Systems from $130.00 to $135.00 and gave the stock an "overweight" rating in a research note on Thursday, August 13th. Truist Financial lifted their price target on shares of Cisco Systems from $125.00 to $140.00 and gave the company a "buy" rating in a report on Thursday, August 13th. Finally, Zacks Research upgraded shares of Cisco Systems from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, September 30th. Three investment analysts have rated the stock with a Strong Buy rating, sixteen have given a Buy rating and seven have assigned a Hold rating to the company's stock. According to MarketBeat, Cisco Systems currently has a consensus rating of "Moderate Buy" and a consensus price target of $128.52.

Cisco Systems Stock Performance

The firm's 50-day moving average price is $112.11 and its 200-day moving average price is $107.43. The company has a debt-to-equity ratio of 0.39, a current ratio of 0.93 and a quick ratio of 0.79. The stock has a market cap of $452.96 billion, a P/E ratio of 34.40, a PEG ratio of 2.47 and a beta of 0.99.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last posted its 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. The company had revenue of $17.25 billion during the quarter, compared to analysts' expectations of $16.84 billion. Cisco Systems had a net margin of 20.95% and a return on equity of 30.16%. Cisco Systems's quarterly revenue was up 17.6% on a year-over-year basis. During the same period last year, the company posted $0.99 earnings per share. 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. Sell-side analysts expect that Cisco Systems, Inc. will post 4.41 earnings per share for the current fiscal year.

Cisco Systems Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Wednesday, October 21st. Investors of record on Friday, October 2nd will be paid a dividend of $0.42 per share. The ex-dividend date of this dividend is Friday, October 2nd. This represents a $1.68 dividend on an annualized basis and a yield of 1.5%. Cisco Systems's dividend payout ratio is presently 50.30%.

Insider Buying and Selling at Cisco Systems

In related news, EVP Deborah L. Stahlkopf sold 6,487 shares of the firm's stock in a transaction on Friday, August 14th. The shares were sold at an average price of $111.53, for a total value of $723,495.11. Following the completion of the transaction, the executive vice president directly owned 167,116 shares of the company's stock, valued at approximately $18,638,447.48. This trade represents a 3.74% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thimaya K. Subaiya sold 5,832 shares of the business's stock in a transaction on Wednesday, August 19th. The stock was sold at an average price of $111.47, for a total transaction of $650,093.04. Following the completion of the sale, the executive vice president owned 128,382 shares in the company, valued at $14,310,741.54. This represents a 4.35% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 44,869 shares of company stock worth $5,005,620 over the last three months. 0.01% of the stock is owned by company insiders.

Institutional Trading of Cisco Systems

Several hedge funds have recently made changes to their positions in the business. BlackRock Inc. purchased a new stake in Cisco Systems during the second quarter valued at approximately $42,129,647,000. State Street Corp increased its position in shares of Cisco Systems by 7.0% during the 2nd quarter. State Street Corp now owns 207,106,569 shares of the network equipment provider's stock valued at $25,278,492,000 after purchasing an additional 13,512,872 shares during the last quarter. Invesco Ltd. increased its position 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 purchasing an additional 6,224,062 shares during the last quarter. Auto Owners Insurance Co raised its holdings in Cisco Systems by 8,718.3% during the 4th quarter. Auto Owners Insurance Co now owns 51,952,421 shares of the network equipment provider's stock valued at $400,190,000 after buying an additional 51,363,281 shares during the period. Finally, Bank of America Corp DE purchased a new stake in Cisco Systems during the 2nd quarter valued at $5,892,379,000. 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 develops networking, cybersecurity, collaboration, observability and data center solutions. Its products and services help businesses, governments, educational institutions and other organizations connect users and devices, manage infrastructure, protect digital environments and support cloud-based operations.

Cisco's portfolio includes routers and switches, wireless networking equipment, network management software, firewalls, identity and access tools, endpoint security products, collaboration applications and observability platforms.

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