Cisco Drops 8% Despite Earnings Beat, Stronger Guidance
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- Cisco shares fell 8.4% on Thursday after the company reported fiscal Q4 revenue of $17.3 billion (up 18%) versus the $16.8 billion analysts expected, per LSEG.
- Cisco guided current-quarter revenue to $18–$18.2 billion, well above the $16.8 billion consensus, but Piper Sandler called the outlook "conservative" and flagged fears of "peak growth."
- Hyperscaler infrastructure orders totaled $4 billion in the quarter, bringing Cisco's fiscal-year tally to $9.3 billion; Cisco expects hyperscaler revenue to nearly double to $7.5 billion in fiscal 2027.
- CEO Chuck Robbins told CNBC's Jim Cramer the company had "a record year, a record quarter" and framed the conservative guide as "prudent" at the start of a new fiscal year.
- Analysts project Cisco's revenue growth will dip back into single digits next fiscal year, even after the roughly 15% growth forecast for the current year.
- KeyBanc Capital Markets reiterated a buy-equivalent rating, citing expected market-share gains as hyperscalers, neoclouds, and others ramp AI-driven capital expenditures.
- Cisco closed at $113.47, well below its June record close of $130, after entering the report up more than 60% year-to-date on AI tailwinds.
Why it matters: Cisco entered earnings as a 2025 AI-trade darling, up 60%+ year-to-date, so a guide that beat consensus yet still landed as "conservative" was enough to wipe out roughly $30 per share from a stock that had just set a June record near $130. Piper Sandler's "peak growth" note captures the shift: even with hyperscaler revenue on track to nearly double to $7.5 billion by fiscal 2027, the market is now repricing Cisco for a return to single-digit growth next year.
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