Cisco Systems Stock Tanks: What Sparked Thursday’s Bloodbath?

Cisco's shares took a nosedive—here's why Wall Street hit the panic button.

The sell-off nobody saw coming

Networking giant Cisco Systems got crushed in Thursday's trading session, leaving analysts scrambling to downgrade price targets. The stock plunged harder than a crypto shitcoin after Elon tweets.

Earnings whiplash strikes again

Another quarter, another case of "guidance roulette"—where Cisco's forward projections proved as reliable as a DeFi oracle during a flash crash. Revenue misses? Check. Cloud growth slowing? Double check.

Institutional investors flee

Hedge funds dumped positions faster than a hot Bitcoin ETF, proving once again that legacy tech stocks can bleed just like their Web3 counterparts when fundamentals crack.

One thing's certain: in today's market, even blue-chips aren't safe from getting rekt—whether by Fed policies, supply chain chaos, or that oldest of killers: overpromising and underdelivering.

Two slight beats

Cisco unveiled its fiscal fourth-quarter and full-year 2025 results just after market close on Wednesday. These revealed that the storied computer networking company managed to boost its revenue by 8% year over year in the former period to $14.67 billion. That was slightly above the consensus analyst estimate of $14.62 billion.

Image source: Getty Images.

Cisco attributed this to growth in overall product orders, which it said was 7% across all its regions. It also flagged artificial intelligence (AI) infrastructure products as growth drivers. In the first half of this calendar year, orders for such products topped $2 billion. This is double -- and then some -- management's target of $1 billion for the period.

On the bottom line, non-GAAP (adjusted) net income landed at $4 billion, shaking out to $0.99 per share. That was 12% higher than the result for the fourth quarter of 2024, and it edged past the average pundit projection of $0.98.

Unsurprising guidance

Cisco also proffered guidance for its current (first) quarter and the entirety of fiscal 2026. It's modeling $59 billion to $60 billion in revenue and adjusted earnings per share of $4.00 to $4.06. This is in line with the consensus analyst expectations of, respectively, $59.5 billion and $4.03.

While Cisco's quarterly performance certainly wasn't bad, it seems investors were expecting more convincing beats and higher guidance, particularly given that AI tailwind.