Cisco Systems (NASDAQ:CSCO) Shares Gap Down – Should You Sell?

Cisco Systems, Inc. (NASDAQ:CSCO) gapped down prior to trading on Thursday . The stock had previously closed at $123.88, but opened at $113.93. Cisco Systems shares last traded at $114.1590, with a volume of 15,389,000 shares.

Trending Headlines about Cisco Systems

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

• Positive Sentiment: AI networking demand is accelerating. Cisco reported $9.3 billion in fiscal 2026 AI infrastructure orders, including $4 billion in the fourth quarter, and expects approximately $7.5 billion of AI infrastructure revenue in fiscal 2027. Networking product orders increased 40% year over year, supporting management’s description of a broader “networking supercycle.” Cisco Q4 Earnings Call Centers on AI Networking Supercycle
• Positive Sentiment: Results and guidance exceeded Wall Street estimates. Fiscal fourth-quarter revenue rose 18% to about $17.3 billion, while non-GAAP EPS of $1.22 surpassed the $1.17 consensus. Cisco forecast fiscal 2027 revenue of $72.2 billion to $73.4 billion and non-GAAP EPS of $5.05 to $5.11, both above analyst expectations. First-quarter revenue and EPS guidance also exceeded consensus. Cisco Reports Fourth Quarter and Fiscal Year 2026 Earnings
• Positive Sentiment: Analysts raised price targets. Wells Fargo, Rosenblatt Securities, KeyCorp, Morgan Stanley and Barclays increased their targets, with ratings ranging from “equal weight” to “buy” or “overweight.”
• Neutral Sentiment: Shareholder returns remain intact. Cisco declared a quarterly dividend of $0.42 per share, payable October 21 to shareholders of record October 2.
• Negative Sentiment: Gross-margin concerns drove the market reaction. Investors worry that supplying large AI infrastructure projects could pressure profitability, while the stock’s premium valuation leaves little room for execution or guidance disappointments. Analysts also noted that strong results and forecasts may not have cleared the market’s unusually high bar for AI-related acceleration. Cisco stock falls on margin concerns

Analyst Upgrades and Downgrades

CSCO has been the subject of a number of recent analyst reports. UBS Group boosted their price objective on shares of Cisco Systems from $95.00 to $132.00 and gave the stock a “buy” rating in a report on Thursday, May 14th. Wells Fargo & Company boosted their price target on Cisco Systems from $130.00 to $150.00 and gave the stock an “overweight” rating in a research note on Thursday. Evercore upped their price target on Cisco Systems from $110.00 to $150.00 and gave the company an “outperform” rating in a report on Thursday, May 14th. The Goldman Sachs Group increased their price objective on Cisco Systems from $116.00 to $125.00 and gave the company a “neutral” rating in a research report on Wednesday, June 3rd. Finally, Argus boosted their target price on Cisco Systems from $100.00 to $150.00 and gave the stock a “buy” rating in a research report on Tuesday, May 19th. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average price target of $129.95.

Cisco Systems Stock Performance

The firm has a market capitalization of $443.79 billion, a PE ratio of 36.59, a price-to-earnings-growth ratio of 2.71 and a beta of 1.02. The company has a current ratio of 0.92, a quick ratio of 0.81 and a debt-to-equity ratio of 0.40. The business’s 50 day simple moving average is $117.56 and its two-hundred day simple moving average is $98.72.

Cisco Systems (NASDAQ:CSCO) last released its quarterly earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.17 by $0.05. Cisco Systems had a return on equity of 28.44% and a net margin of 20.14%.The firm had revenue of $17.25 billion for the quarter, compared to the consensus estimate of $16.84 billion. During the same period last year, the business posted $0.99 EPS. The company’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. Research analysts expect that Cisco Systems, Inc. will post 3.54 earnings per share for the current fiscal year.

Cisco Systems Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, October 21st. Stockholders of record on Friday, October 2nd will be given a dividend of $0.42 per share. This represents a $1.68 dividend on an annualized basis and a dividend yield of 1.5%. The ex-dividend date of this dividend is Friday, October 2nd. Cisco Systems’s payout ratio is presently 54.55%.

Insider Buying and Selling

In other news, EVP Oliver Tuszik sold 2,761 shares of the business’s stock in a transaction dated Friday, May 15th. The stock was sold at an average price of $114.61, for a total value of $316,438.21. Following the transaction, the executive vice president directly owned 180,877 shares in the company, valued at $20,730,312.97. The trade was a 1.50% decrease in their ownership of the stock. The sale was disclosed in a legal filing 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, insider Jeetendra I. Patel sold 7,169 shares of the business’s stock in a transaction on Friday, May 15th. The stock was sold at an average price of $117.28, for a total transaction of $840,780.32. Following the completion of the transaction, the insider directly owned 246,737 shares in the company, valued at $28,937,315.36. This trade represents a 2.82% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 47,650 shares of company stock worth $5,668,823 in the last three months. Corporate insiders own 0.01% of the company’s stock.

Hedge Funds Weigh In On Cisco Systems

A number of hedge funds have recently added to or reduced their stakes in the stock. Cozad Asset Management Inc. increased its position in shares of Cisco Systems by 0.3% during the first quarter. Cozad Asset Management Inc. now owns 26,203 shares of the network equipment provider’s stock valued at $2,033,000 after buying an additional 87 shares during the period. Dogwood Wealth Management LLC increased its holdings in Cisco Systems by 3.9% during the 2nd quarter. Dogwood Wealth Management LLC now owns 2,413 shares of the network equipment provider’s stock worth $283,000 after acquiring an additional 90 shares during the period. August Group Capital Ltd lifted its stake in Cisco Systems by 2.0% in the 2nd quarter. August Group Capital Ltd now owns 4,723 shares of the network equipment provider’s stock worth $555,000 after purchasing an additional 91 shares in the last quarter. Financial Insights Inc. boosted its holdings in Cisco Systems by 1.5% in the 1st quarter. Financial Insights Inc. now owns 6,220 shares of the network equipment provider’s stock valued at $483,000 after purchasing an additional 92 shares during the period. Finally, CPA Asset Management Group LLC increased its holdings in shares of Cisco Systems by 1.8% in the second quarter. CPA Asset Management Group LLC now owns 5,335 shares of the network equipment provider’s stock worth $627,000 after purchasing an additional 93 shares during the period. 73.33% of the stock is currently owned by institutional investors.

Cisco Systems Company Profile

Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.

In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.