Cisco Systems Faces Stock Decline After Earnings Report
Cisco Systems, traded under NASDAQ: CSCO, didn’t have the best day on Thursday. Investors chose to sell off shares following the release of their quarterly earnings, which resulted in a stock drop of over 1%. Meanwhile, the S&P 500 indexes remained largely unchanged.
The company announced its fourth-quarter and full-year results for 2025 after market close on Wednesday. It showed that Cisco, a leader in computer networking, generated revenues of $14.67 billion—an increase of 8% compared to the previous year. This figure slightly exceeded analysts’ expectations of $14.62 billion.
Cisco attributed this revenue growth to a 7% overall increase in orders across all regions, largely driven by demand for Artificial Intelligence (AI) infrastructure products. They noted that order totals for these products surpassed $2 billion in the first half of the year, a notable achievement considering the management had initially aimed for $1 billion during that time.
On the earnings side, Cisco’s adjusted net income reached $4 billion, translating to $0.99 per share. This performance marked a 12% increase from the previous year’s fourth quarter and was above the anticipated average of $0.98 per share.
The company also offered guidance for the current quarter and fiscal year 2026, forecasting revenues between $59 billion and $60 billion. Adjusted earnings are projected to be between $4.00 and $4.06, which aligns closely with analysts’ expectations of $59.5 billion and $4.03 respectively.
While the quarterly results were solid, it appears investor sentiment leaned towards disappointment, as many had hoped for a stronger performance and more optimistic guidance given the ongoing AI momentum.
Investors should consider this before deciding on Cisco shares.
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