Cisco Systems (NASDAQ:CSCO) Trading Down 1.8% - Should You Sell?

Key Points

• Cisco shares fell 1.8% to about $107.44, while trading volume was roughly half its average. The stock trades at approximately 32 times earnings and remains below its 52-week high, raising valuation and profit-taking concerns.
• Cisco is benefiting from AI-related opportunities, including AMD and Humain’s Middle Eastern GPU-as-a-service deployment, AI-enabled Webex offerings, and quantum-networking research. However, reliance on hyperscale customers and hardware-heavy growth could pressure margins.
• Wall Street remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $129.68 versus the current price. Recent earnings exceeded expectations, revenue rose 17.6% year over year, and Cisco declared a $0.42 quarterly dividend yielding about 1.6%.

Shares of Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) fell 1.8% during trading on Thursday . The company traded as low as $107.36 and last traded at $107.44. 11,286,538 shares changed hands during mid-day trading, a decline of 51% from the average session volume of 22,856,443 shares. The stock had previously closed at $109.43.

Key Cisco Systems News

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

• Positive Sentiment: Cisco announced a collaboration with quantum-computing company Infleqtion to research technologies for connecting, operating, and scaling distributed quantum systems. The initiative could support a long-term opportunity in quantum networking, although commercial benefits are likely distant. Infleqtion and Cisco Announce Collaboration to Advance Networked Quantum Technology
• Positive Sentiment: Cisco’s WebexOne conference will highlight enterprise use cases for AI-powered collaboration and customer experience, reinforcing the company’s positioning in AI-enabled workplace software and services. Global Industry Leaders Join Cisco’s WebexOne
• Positive Sentiment: Cisco’s AI infrastructure exposure received another potential boost from its live partnership with AMD and Humain in Saudi Arabia. The deployment combines AMD processors with Cisco Silicon One 800G networking to support GPU-as-a-service across the Middle East. AMD Partnership With Cisco Could Unlock Middle East AI Opportunity
• Neutral Sentiment: Analyst coverage remains broadly constructive, with a consensus “Moderate Buy” rating and a favorable average brokerage recommendation. However, the articles caution that sell-side ratings can be overly optimistic and should not be treated as a standalone buy signal. Cisco Receives Consensus Rating of Moderate Buy
• Negative Sentiment: Investors are concerned that Cisco’s AI-led growth is increasingly tied to hyperscale customers. A sharp increase in AI inference traffic supports demand for networking equipment, but hardware-heavy growth could pressure gross margins. Cisco Says AI Agents Consume 60% of Global Inference
• Negative Sentiment: Recent commentary also points to profit-taking and downside risk after a substantial year-to-date and 12-month advance, with Cisco trading below its 52-week high. At roughly 32 times earnings, the stock leaves less room for disappointment if hyperscaler spending, margins, or growth expectations weaken. How Far Could Cisco Stock Fall With Growth Riding on Hyperscalers?

Wall Street Analysts Forecast Growth

A number of equities research analysts have recently weighed in on the stock. Morgan Stanley boosted their price objective on shares of Cisco Systems from $130.00 to $135.00 and gave the company an "overweight" rating in a report on Thursday, August 13th. New Street Research lifted their price target on Cisco Systems from $82.00 to $122.00 and gave the company a "neutral" rating in a research report on Thursday, May 14th. Truist Financial lifted their target price 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. The Goldman Sachs Group lifted their price objective on shares of Cisco Systems from $116.00 to $125.00 and gave the company a "neutral" rating in a report on Wednesday, June 3rd. Finally, Argus boosted their price target on shares of Cisco Systems from $100.00 to $150.00 and gave the stock a "buy" rating in a report on Tuesday, May 19th. Two 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. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $129.68.

Cisco Systems Stock Down 1.8%

The business's 50 day moving average is $113.77 and its 200-day moving average is $103.04. The company has a market cap of $423.59 billion, a PE ratio of 32.17, a P/E/G ratio of 2.27 and a beta of 1.00. The company has a debt-to-equity ratio of 0.39, a current ratio of 0.93 and a quick ratio of 0.79.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last posted its quarterly earnings data on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share for the quarter, topping analysts' consensus estimates of $1.17 by $0.05. Cisco Systems had a return on equity of 30.16% and a net margin of 20.95%.The company had revenue of $17.25 billion during the quarter, compared to analysts' expectations of $16.84 billion. During the same period last year, the firm earned $0.99 EPS. The firm's revenue for the quarter 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. As a group, analysts predict that Cisco Systems, Inc. will post 4.43 EPS for the current 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 paid a $0.42 dividend. This represents a $1.68 dividend on an annualized basis and a yield of 1.6%. The ex-dividend date of this dividend is Friday, October 2nd. Cisco Systems's dividend payout ratio (DPR) is presently 50.30%.

Insider Buying and Selling

In related news, EVP Oliver Tuszik sold 2,760 shares of the business's stock in a transaction that occurred on Friday, August 14th. The stock was sold at an average price of $112.46, for a total transaction of $310,389.60. Following the transaction, the executive vice president directly owned 165,276 shares of the company's stock, valued at approximately $18,586,938.96. The trade was a 1.64% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible 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 stock in a transaction that occurred 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 completion of the sale, the executive vice president directly owned 140,857 shares of the company's stock, valued at $16,890,162.87. This trade represents a 4.82% decrease in their position. 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. Insiders have sold 51,004 shares of company stock worth $5,750,920 over the last 90 days. Company insiders own 0.01% of the company's stock.

Hedge Funds Weigh In On Cisco Systems

A number of institutional investors and hedge funds have recently added to or reduced their stakes in CSCO. Brighton Jones LLC raised its position in shares of Cisco Systems by 49.5% in the 4th quarter. Brighton Jones LLC now owns 74,187 shares of the network equipment provider's stock valued at $4,392,000 after purchasing an additional 24,562 shares in the last quarter. Revolve Wealth Partners LLC grew its holdings in Cisco Systems by 37.0% during the 4th quarter. Revolve Wealth Partners LLC now owns 9,156 shares of the network equipment provider's stock worth $542,000 after acquiring an additional 2,474 shares in the last quarter. Sivia Capital Partners LLC increased its position in shares of Cisco Systems by 7.5% in the 2nd quarter. Sivia Capital Partners LLC now owns 10,178 shares of the network equipment provider's stock worth $706,000 after purchasing an additional 712 shares during the last quarter. Schnieders Capital Management LLC. lifted its holdings in Cisco Systems by 3.9% during the 2nd quarter. Schnieders Capital Management LLC. now owns 13,974 shares of the network equipment provider's stock worth $969,000 after buying an additional 519 shares during the last quarter. Finally, Marshall Wace LLP increased its holdings in shares of Cisco Systems by 118.1% in the 2nd quarter. Marshall Wace LLP now owns 90,650 shares of the network equipment provider's stock valued at $6,289,000 after acquiring an additional 590,650 shares during the last quarter. 73.33% of the stock is 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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