Cisco Stock Drops Despite Earnings Beat as Revenue Guidance Disappoints
Cisco Systems outperformed Wall Street expectations with Q2 earnings of $1.04 per share against a $1.02 estimate, while revenue reached $15.3 billion versus the projected $15.11 billion. The networking segment saw a 21% annual surge to $8.29 billion, fueled by robust demand for AI hardware.
Despite these results, shares tumbled 5% in after-hours trading as the company's full-year revenue forecast of $61.2-$61.7 billion fell short of analysts' $63.9 billion expectation. Adjusted gross margins of 67.5% also missed the 68.14% target, pressured by rising memory chip costs.
The launch of Cisco's Silicon One G300 AI chip signals its push into artificial intelligence infrastructure, with anticipated AI orders surpassing $5 billion this fiscal year. Market reaction underscores how forward guidance often outweighs current performance in tech valuations.
