Cisco Systems (NASDAQ:CSCO) Shares Gap Down – What’s Next?

Cisco Systems, Inc. (NASDAQ:CSCO) shares gapped down before the market opened 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 traded.

Cisco Systems News Summary

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

• Positive Sentiment: AI demand is accelerating. Cisco reported fiscal Q4 revenue of approximately $17.3 billion, up 18% year over year, and adjusted EPS of $1.22 versus the $1.17 consensus estimate. AI infrastructure orders increased 4.5 times to $9.3 billion for fiscal 2026, while management expects approximately $7.5 billion of hyperscaler AI infrastructure revenue in fiscal 2027. Chuck Robbins Says AI Is Fueling a Networking Supercycle
• Positive Sentiment: Fiscal 2027 guidance exceeded expectations. Management forecast roughly 15% revenue growth, supported by hyperscaler spending, data-center switching and broader networking upgrades. Several firms—including UBS, Truist, Wells Fargo, KeyCorp, Morgan Stanley and Rosenblatt—raised their price targets and maintained bullish ratings, suggesting long-term upside if the AI networking cycle continues. Cisco Just Gave Investors Three Big Reasons to Be Bullish
• Neutral Sentiment: The market is demanding faster growth. Despite the earnings beat and upbeat outlook, Cisco’s shares have decreased because expectations were already elevated after a substantial rally. Investors are questioning whether the company’s AI momentum can remain strong beyond the current infrastructure buildout and whether Cisco’s premium valuation is justified. Cisco Shares Slide Despite Earnings Beat and Strong Guidance
• Negative Sentiment: Margin pressure is the primary concern. AI infrastructure growth is arriving mainly through lower-margin hardware, creating mix-related gross-margin compression and raising questions about how profitably Cisco can scale orders. HSBC downgraded CSCO to Hold from Buy and reduced its price target to $120 from $137, citing a lack of near-term catalysts even after the strong quarter. Cisco Beat on Every Line, Then Fell on What AI Costs to Ship

Analyst Ratings Changes

A number of research analysts recently commented on CSCO shares. Wells Fargo & Company boosted their price target on Cisco Systems from $130.00 to $150.00 and gave the company an “overweight” rating in a research note on Thursday. Zacks Research downgraded shares of Cisco Systems from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, August 4th. BNP Paribas Exane raised their target price on shares of Cisco Systems from $87.00 to $132.00 and gave the company an “outperform” rating in a report on Thursday, May 14th. CICC Research boosted their target price on shares of Cisco Systems from $96.00 to $125.00 and gave the company an “outperform” rating in a research report on Monday, May 18th. Finally, Rosenblatt Securities upped their price target on shares of Cisco Systems from $150.00 to $165.00 and gave the stock a “buy” rating in a report on Thursday. One research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and seven have assigned a Hold rating to the company. According to MarketBeat.com, Cisco Systems has an average rating of “Moderate Buy” and a consensus price target of $129.43.

Cisco Systems Stock Down 1.6%

The company has a market capitalization of $440.18 billion, a price-to-earnings ratio of 33.44, a P/E/G ratio of 2.56 and a beta of 1.02. The company has a debt-to-equity ratio of 0.39, a current ratio of 0.93 and a quick ratio of 0.81. The firm’s fifty day moving average price is $117.03 and its 200-day moving average price is $99.09.

Cisco Systems (NASDAQ:CSCO) last released its quarterly earnings data 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. 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 for the quarter, compared to the consensus estimate of $16.84 billion. During the same quarter last year, the business posted $0.99 EPS. Cisco Systems’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. Sell-side analysts expect that Cisco Systems, Inc. will post 4 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. Stockholders of record on Friday, October 2nd will be issued a dividend of $0.42 per share. This represents a $1.68 annualized dividend and a dividend yield of 1.5%. The ex-dividend date is Friday, October 2nd. Cisco Systems’s payout ratio is 54.55%.

Insider Transactions at Cisco Systems

In other news, EVP Oliver Tuszik sold 2,607 shares of the company’s stock in a transaction that occurred on Thursday, June 11th. The stock was sold at an average price of $121.12, for a total value of $315,759.84. Following the completion of the transaction, the executive vice president owned 172,727 shares of the company’s stock, valued at $20,920,694.24. This represents a 1.49% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Charles Robbins sold 21,400 shares of the firm’s stock in a transaction that occurred on Friday, May 22nd. The shares were sold at an average price of $120.03, for a total transaction of $2,568,642.00. Following the completion of the transaction, the chief executive officer owned 637,085 shares of the company’s stock, valued at approximately $76,469,312.55. This trade represents a 3.25% 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. Over the last three months, insiders have sold 31,134 shares of company stock worth $3,739,000. Insiders own 0.01% of the company’s stock.

Hedge Funds Weigh In On Cisco Systems

A number of hedge funds have recently modified their holdings of the business. Intesa Sanpaolo Wealth Management acquired a new position in Cisco Systems during the 4th quarter worth about $25,000. MidAtlantic Capital Management Inc. acquired a new stake in shares of Cisco Systems in the fourth quarter valued at about $25,000. Networth Advisors LLC raised its position in shares of Cisco Systems by 276.4% during the first quarter. Networth Advisors LLC now owns 335 shares of the network equipment provider’s stock worth $26,000 after acquiring an additional 246 shares during the last quarter. Manning & Napier Advisors LLC raised its position in shares of Cisco Systems by 137.0% during the first quarter. Manning & Napier Advisors LLC now owns 346 shares of the network equipment provider’s stock worth $27,000 after acquiring an additional 200 shares during the last quarter. Finally, Financial Life Planners acquired a new position in shares of Cisco Systems in the first quarter worth approximately $27,000. Institutional investors and hedge funds own 73.33% of the company’s stock.

About Cisco Systems

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.