Cisco Systems Stock Slumps on Analyst Downgrade Amid Tepid AI Growth Outlook
Cisco Systems (CSCO) shares fell nearly 5% Friday after HSBC analyst Stephen Bersey downgraded the stock to 'hold,' citing disappointing fiscal Q4 earnings and weak 2026 guidance. The drop significantly underperformed the broader market's 0.3% decline.
Bersey maintained a $69 price target but expressed concerns about Cisco's Core networking business, where destocking effects appear to have run their course. While acknowledging potential in AI component sales, the analyst concluded these gains wouldn't offset weaknesses elsewhere.
The market reaction reflects heightened investor expectations around Cisco's AI push. Despite reporting revenue and adjusted profit growth, the company failed to meet bullish projections for its artificial intelligence initiatives.
