Cisco Stock Dives 9% Despite 50% Profit Jump as Margin Guidance Disappoints
CSCO sits 74% above its 52-week low of $65.75.
Summary
Cisco's Q4 profit jumped 50% year-over-year on AI-driven demand, but shares fell 9% in early trading as investors balked at margin and earnings guidance. The company guided current-quarter gross margins to 65%-66%, down from 66.3%, and EPS of $1.32-$1.34, implying a sequential decline. Full-year EPS guidance of $5.05-$5.11 also suggests conservative revenue projections. This follows yesterday's 8-K and Reuters report on fiscal 2027 revenue guidance of $72.2B-$73.4B, which beat consensus but failed to satisfy elevated AI expectations. The market is punishing even slight cracks in AI bullishness, and Cisco's hardware mix shift is the culprit. Watch for stabilization in AI networking demand and any upward revision to margin guidance in the next earnings call.
At the time of this announcement, CSCO was trading at $114.48 on NASDAQ in the Technology sector, with a market capitalization of approximately $451.2B. The 52-week trading range was $65.75 to $130.37. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.