Cisco Systems (NASDAQ:CSCO) Stock Price Down 2.2% - What's Next?

Key Points

• Cisco shares fell 2.2% to $104.89 amid concerns that its AI-driven growth narrative may be overbought, with a P/E ratio above 31 and ETF selling adding technical pressure.
• The company is expanding its AI networking portfolio with high-density switches, optical technology and enhanced SONiC and security tools, positioning it to benefit from continued data-center investment.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and $128.52 price target; Cisco also recently beat quarterly earnings and revenue estimates and pays a $0.42 quarterly dividend.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) dropped 2.2% during trading on Thursday. The stock traded as low as $103.58 and last traded at $104.89. 17,067,098 shares were traded during mid-day trading, a decline of 23% from the average session volume of 22,106,855 shares. The stock had previously closed at $107.26.

Key Cisco Systems News

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

• Positive Sentiment: Cisco unveiled high-density AI networking products, including Silicon One G302 switches and a planned 400Gb/s-per-lane optical module developed with NVIDIA, TE Connectivity and Amphenol. Expanded SONiC support and AI-operations security tools strengthen the company’s effort to capture spending across networking hardware, silicon, optics and software. Did AI Networking Expansion Just Shift Cisco's Investment Narrative?
• Positive Sentiment: Longer-term bullish commentary argues that Cisco can benefit from continued AI data-center investment and from software that helps customers monitor AI usage and control rising model-inference costs. Cisco: Can It Profit From Helping Customers Spend Less on AI?
• Neutral Sentiment: ETF funds were net sellers of CSCO on October 20, adding a technical source of pressure that does not necessarily reflect a change in Cisco’s operating outlook. ETFs Are Net Sellers of Cisco
• Neutral Sentiment: Analysts continue to debate whether Cisco’s AI opportunity represents a durable shift from its traditional enterprise networking business. Comparisons with Arista Networks highlight the importance of execution, data-center design wins and margins. Arista Networks Versus Cisco Systems
• Negative Sentiment: The latest decline reflects Cisco falling more than the broader market, while commentary from Seeking Alpha characterized the stock’s AI narrative as overbought and maintained a Hold view. At a price-to-earnings ratio above 31, investors may be demanding substantial AI growth before awarding the shares a higher valuation. Here's Why Cisco Systems Fell More Than the Broader Market

Analyst Upgrades and Downgrades

A number of equities analysts have issued reports on CSCO shares. Zacks Research upgraded shares of Cisco Systems from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, September 30th. Deutsche Bank Aktiengesellschaft began coverage on shares of Cisco Systems in a research note on Tuesday, September 1st. They set a "buy" rating and a $135.00 price objective on the stock. Freedom Capital raised Cisco Systems from a "hold" rating to a "strong-buy" rating in a research note on Sunday, August 16th. Wall Street Zen raised Cisco Systems from a "hold" rating to a "buy" rating in a research report on Sunday, October 11th. Finally, Weiss Ratings reiterated a "buy (b)" rating on shares of Cisco Systems in a research note on Wednesday, August 26th. Three equities research 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's stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $128.52.

Cisco Systems Stock Performance

The business has a fifty day simple moving average of $110.28 and a two-hundred day simple moving average of $109.88. The company has a quick ratio of 0.79, a current ratio of 0.93 and a debt-to-equity ratio of 0.39. The company has a market cap of $413.54 billion, a P/E ratio of 31.40, a P/E/G ratio of 2.22 and a beta of 0.99.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last issued its quarterly earnings data on Wednesday, August 12th. The network equipment provider reported $1.22 EPS for the quarter, topping analysts' consensus estimates of $1.17 by $0.05. The business 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%. The business's revenue was up 17.6% on a year-over-year basis. During the same period last year, the company posted $0.99 EPS. 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 anticipate that Cisco Systems, Inc. will post 4.42 EPS for the current year.

Cisco Systems Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, October 21st. Investors of record on Friday, October 2nd were given a $0.42 dividend. The ex-dividend date was Friday, October 2nd. This represents a $1.68 dividend on an annualized basis and a yield of 1.6%. Cisco Systems's dividend payout ratio (DPR) is currently 50.30%.

Insider Transactions at Cisco Systems

In other Cisco Systems news, EVP Thimaya K. Subaiya sold 312 shares of the firm's stock in a transaction dated Monday, September 14th. The shares were sold at an average price of $110.18, for a total value of $34,376.16. Following the completion of the sale, the executive vice president owned 127,661 shares of the company's stock, valued at $14,065,688.98. This trade represents a 0.24% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Charles Robbins sold 21,628 shares of the business's stock in a transaction that occurred on Friday, August 14th. The shares were sold at an average price of $111.54, for a total value of $2,412,387.12. Following the transaction, the chief executive officer owned 602,710 shares of the company's stock, valued at $67,226,273.40. This trade represents a 3.46% 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. In the last ninety days, insiders have sold 44,869 shares of company stock worth $5,005,620. 0.01% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Cisco Systems

A number of institutional investors and hedge funds have recently modified their holdings of CSCO. BIP Wealth LLC grew its stake in Cisco Systems by 21.9% in the 3rd quarter. BIP Wealth LLC now owns 29,946 shares of the network equipment provider's stock worth $3,223,000 after acquiring an additional 5,386 shares in the last quarter. River Street Advisors LLC purchased a new position in shares of Cisco Systems during the third quarter worth approximately $349,000. MBL Wealth LLC raised its stake in shares of Cisco Systems by 11.6% during the third quarter. MBL Wealth LLC now owns 14,942 shares of the network equipment provider's stock valued at $1,608,000 after acquiring an additional 1,554 shares in the last quarter. WP Advisors LLC raised its stake in shares of Cisco Systems by 47.2% during the third quarter. WP Advisors LLC now owns 2,536 shares of the network equipment provider's stock valued at $273,000 after acquiring an additional 813 shares in the last quarter. Finally, Sharkey Howes & Javer boosted its holdings in shares of Cisco Systems by 12.7% in the third quarter. Sharkey Howes & Javer now owns 3,038 shares of the network equipment provider's stock valued at $327,000 after purchasing an additional 343 shares during the period. 73.33% of the stock is owned by institutional investors.

Cisco Systems Company Profile

Cisco Systems, Inc is a global technology company that develops networking, cybersecurity, collaboration and observability solutions for businesses, government organizations and service providers. Its offerings include routers, switches, wireless networking equipment, data-center infrastructure, security software and services, as well as technologies that support cloud and hybrid IT environments.

The company also provides collaboration tools through its Webex portfolio, cloud-managed networking through Cisco Meraki and security and observability capabilities that include technologies from Splunk, which Cisco acquired in 2024.

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