Cisco Shares Drop 7% Despite Strong AI Infrastructure Orders and Earnings Beat
Cisco Systems (CSCO) saw its shares decline 7% in after-hours trading, even as the company reported better-than-expected Q4 revenue and profit. The tech giant posted $15.4 billion in revenue, surpassing analyst estimates of $15.1 billion, while net income ROSE to $3.2 billion from $2.4 billion a year earlier. Core networking sales surged 21% to $8.3 billion, driven by enterprise and cloud demand.
Investor sentiment remained cautious as Cisco's guidance for the next quarter matched but did not exceed expectations. The company secured $2.1 billion in AI infrastructure orders, including Nvidia-powered switches and projects in Saudi Arabia. However, growth was uneven, with hyperscale cloud providers leading while enterprise, security, and services segments lagged.
Cisco's Saudi AI venture represents a long-term strategic play with minimal near-term revenue impact. The market reaction underscores the tension between strong current performance and tempered future outlooks in the tech sector.