CSCO stock | Cisco Stock Drops Again as AI Hardware Squeezes Margins

Cisco Stock Drops Again as AI Hardware Squeezes Margins

GURU Focus

Cisco's AI infrastructure orders are exploding, but lower product margins are testing how profitably it can convert that demand.

 the networking and cybersecurity giant, delivered record numbers. Wall Street sold the stock anyway. Shares plunged 8.4% Thursday and slipped another 2% Friday morning despite revenue jumping 18% to $17.3 billion and adjusted earnings climbing 23% to $1.22 per share. That tells you almost everything. Cisco's problem is not growth. It is expectations. Investors have already priced in a monster AI opportunity, and monster expectations demand monster execution.

The AI engine is certainly roaring. Hyperscaler AI infrastructure orders hit $4 billion in the quarter and $9.3 billion for fiscal 2026. Cisco turned roughly $4 billion of that demand into revenue and expects AI infrastructure revenue to rocket to $7.5 billion in fiscal 2027. Networking product orders surged 40%, extending double-digit growth to eight straight quarters. But here comes the uncomfortable part. Adjusted product gross margin dropped to 64.8% from 67.5% a year earlier as hardware became a bigger piece of the mix. Cisco is selling more AI gear. A lot more. The question is how much of that explosive growth ultimately drops to the bottom line.

And the valuation leaves little room for excuses. Cisco traded at $111.205 on Aug. 14 versus a GF Value™ estimate of just $71.61. That puts the stock 55.29% above GF Value™. That is a massive gap. Management is guiding fiscal 2027 revenue to $72.2 billion to $73.4 billion and adjusted earnings to $5.05–$5.11 per share, while AI infrastructure revenue could jump roughly 87.5%. Great growth. Expensive stock. Cisco now has to prove that AI can do more than inflate the order book and top line. It has to protect margins and turn those billions of AI dollars into serious profit. At this valuation, good execution may not be good enough.

Juniper network competitors

 Juniper Networks is a major player in enterprise routing, switching, and AI-driven networking (Mist AI). Its primary competitors vary by specific sector, ranging from massive legacy tech conglomerates to high-performance, cloud-first alternatives. [1, 2, 3, 4, 5]

The top competitors in the networking space include:

• Cisco Systems: The undisputed industry leader, offering a comprehensive suite of routers, switches, and the cloud-managed Meraki platform. Cisco focuses heavily on end-to-end integration and enterprise-wide solutions. [1, 2]
• Arista Networks: A major competitor specializing in high-performance Ethernet switches and cloud-grade routing, widely used in massive cloud datacenters and high-frequency trading. [1, 2]
• HPE Aruba Networking: Hewlett Packard Enterprise provides strong campus, branch, and data center networking, competing directly with Juniper’s enterprise and wireless portfolios. [1, 2, 3, 4, 5]
• Extreme Networks: A direct competitor in enterprise switching, wireless access, and cloud management, often compared for their similar "AI-driven" focus. [1, 2, 3, 4]
• Fortinet & Palo Alto Networks: While known primarily for cybersecurity (firewalls and SASE), both companies offer secure networking hardware that competes with Juniper's secure SD-WAN and branch solutions. [1, 2, 3, 4, 5]

If you are looking to compare Juniper to any of these alternatives for a specific project, let me know:

• What specific technology you are looking for (switching, routing, or Wi-Fi).
• The scale of your deployment (e.g., small branch, campus, or massive datacenter).
• What features are most critical to your organization.

I can help narrow down the field and compare the options side by side.

CSCO stock | Cisco’s stock pops 17% on surging AI orders, as company says it’s cutting almost 4,000 jobs

Cisco’s stock pops 17% on surging AI orders, as company says it’s cutting almost 4,000 jobs

Published Wed, May 13 20264:12 PM EDTUpdated An Hour Ago

 Key Points

• Cisco reported better-than-expected earnings and revenue.
• Heading into earnings, Wall Street was showing increased optimism around the networking company, which has trailed many of its data center peers during the AI boom.
• The company showed off new networking switches and routers during the quarter.

• Cisco shares soared 17% in extended trading on Wednesday after the networking company issued results and guidance that topped Wall Street’s projections.

  The company said it’s cutting its workforce this quarter by fewer than 4,000 jobs, representing less than 5% of total employees.

  Here’s how the company did in comparison with LSEG consensus:

  • Earnings per share: $1.06 adjusted vs. $1.04 expected
  • Revenue: $15.84 billion vs. $15.56 billion expected

  Revenue increased 12% in the quarter ended April 25, from $14.15 billion a year earlier, Cisco said in a statement. Net income rose to $3.37 billion, or 85 cents per share, from $2.49 billion, or 62 cents per share, a year earlier.

  For the fiscal fourth quarter, Cisco called for $1.16 to $1.18 in adjusted earnings per share on $16.7 billion to $16.9 billion in revenue. Analysts polled by LSEG were looking for $1.07 in adjusted earnings per share on $15.82 billion in revenue.

  Cisco said it has received $5.3 billion in artificial intelligence infrastructure and hyperscaler orders so far this year, and raised its expected orders for the fiscal year to $9 billion, up from $5 billion. The company said it expects fiscal-year revenue in that market of $4 billion, up from a prior projection of $3 billion.

  While Cisco has trailed many of its data center peers in the AI race, Wall Street has been rallying to the company’s story of late, pushing the stock to a record late last year, finally surpassing its dot-com high. The shares have continued to climb this year, gaining 33%, topping the Nasdaq’s 14% advance.

  Should the stock maintain its after-hours gains through Thursday, it would mark the sharpest rally since 2002.

  CEO Chuck Robbins wrote in a blog post on Wednesday that the latest round of job cuts will begin on May 14. Cisco is the latest company to announce head count reductions tied to AI.

  “The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest,” Robbins said. “I’m confident Cisco will be one of those winners. This means making hard decisions — about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.”

  Cisco said in a filing that severance and other costs will result in pre-tax charges of $1 billion, and that the company will recognize about $450 million of that in the fiscal fourth quarter.

  During the third quarter, Cisco announced switches and routers that use its next-generation processor. The company also debuted a leaderboard for ranking generative AI models based on their robustness against cybersecurity attacks.

  Cisco’s networking revenue increased 25% to $8.82 billion, exceeding the $8.47 billion consensus among analysts polled by StreetAccount. Security revenue was flat at about $2 billion, compared to StreetAccount’s $1.99 billion consensus.

  Executives will discuss the results with analysts on a conference call starting at 4:30 p.m. ET.

Warren buffett interview from CNBC 2026

 Warren Buffett participated in a prominent "sideline" interview with CNBC's Becky Quick on May 2, 2026, during the 2026 Berkshire Hathaway Annual Meeting. This meeting was notably the first since Buffett's retirement as CEO the previous year, with Greg Abel presiding over the event. 

Key Themes from the May 2026 Interview

• Investing Environment: Buffett stated that current market conditions are not an "ideal environment" for deploying Berkshire's record cash pile, which was nearing $400 billion.
• Market Sentiment: He compared the current market to a "church with a casino attached," noting that a "gambling mood" is prevalent, especially with short-term options trading.
• Succession and Management: Buffett praised his successor, CEO Greg Abel, calling the choice "100% successful" and stating that Abel is doing everything he did and more.
• Artificial Intelligence and Deepfakes: He expressed uncertainty about the future of AI and cybersecurity risks, particularly after a deepfake version of himself asked a question during the meeting.
• The Golden Rule: Buffett emphasized that the most important rule for shareholders and partners is to "treat others as they wish to be treated". 

Earlier 2026 Interviews

• March 31, 2026 (Squawk Box): In an exclusive interview, Buffett discussed the Fed's inflation targets, geopolitical tensions regarding Iran, and a new charity auction with Stephen and Ayesha Curry.
• January 13, 2026 (Special Presentation): CNBC aired "Warren Buffett: A Life and Legacy," a special program featuring exclusive interviews reflecting on his career and philanthropy following his retirement as CEO.

Why Zscaler (ZS) Stock Is Up Today

What Happened?

Shares of cloud security platform Zscaler ZS jumped 2.5% in the morning session after strong earnings and upbeat forecasts from several peers boosted the broader software sector.

The gains appeared driven by positive sentiment across the software-as-a-service (SaaS) space. For instance, enterprise software maker Atlassian saw its shares surge after lifting its annual forecast, which in turn lifted peers like Salesforce and ServiceNow.

Similarly, Twilio's stock jumped after it reported first-quarter revenue that beat estimates and raised its own forecast, with its CEO highlighting artificial intelligence as a catalyst. This positive news from peers helped create a favorable environment for software stocks, which some strategists noted had been underperforming the broader market and were potentially positioned for a comeback.

What Is The Market Telling Us

Zscaler’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 10 days ago when the stock gained 4.1% on the news that cybersecurity stocks rebounded as analysts projected potential gains from the adoption of AI models.

The momentum was catalyzed by a KeyBanc survey of CIOs, which revealed a positive impact on cyber budgets within the next year due to Anthropic's Mythos AI model. Leading cybersecurity platforms are expected to benefit from the projected growth as enterprises expand their security budgets to stay ahead of the latest threats.

Zscaler is down 36.7% since the beginning of the year, and at $139.58 per share, it is trading 58.5% below its 52-week high of $336.27 from November 2025. Investors who bought $1,000 worth of Zscaler’s shares 5 years ago would now be looking at only $772.93.

ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.

Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE

Why ServiceNow Stock Topped the Market Today

Not for the first time in recent weeks, the company has taken ownership of a cybersecurity specialist.

By Eric Volkman – Apr 21, 2026 at 6:07PM EST 

Key Points

• These buys will enhance its native platform.
• Cybersecurity solutions are justifiably popular in a world loaded with hacking threats.
• Motley Fool Issues Rare "Total Conviction" Buy Alert ›

Enterprise software developer ServiceNow (NOW+0.42%) enjoyed a modest rally on the stock exchange Tuesday, with its shares gaining 0.4% on a day when the benchmark S&P 500 index landed in negative territory. Investors were cheered by the company's closing of its latest asset buy.

New month, new acquisition

Just after market close on Monday, ServiceNow divulged that it had completed its acquisition of cybersecurity company Armis. The deal was originally announced last December, with the two companies agreeing that ServiceNow would be Armis' new owner for roughly $7.75 billion in cash.

In its press release trumpeting the acquisition's close, ServiceNow said that owning Armis "extends ServiceNow's security platform into the physical and operational layers of the enterprise, adding the cyber asset intelligence foundation and business context that enterprises need to deploy agentic artificial intelligence (AI) with trust and control at scale."

ServiceNow has been on something of a cybersecurity shopping spree lately. Early last month it finalized the acquisition of identity security company Veza. In contrast to the Armis deal it did not disclose the price it paid, although reports from several media outlets put the cost at over $1 billion.

Spending while flush

ServiceNow wrote that it is funding the Armis deal with a combination of cash on hand and debt. It didn't provide more details. As of the end of 2025, it had a fairly solid position in cash and short-term investments of nearly $6.3 billion. Its long-term debt at that point stood at under $2.3 billion.

So while neither of these recent acquisitions is coming cheap, they're within ServiceNow's means to pay for them. And cybersecurity, in many forms, will always be mission-critical and important to a wide range of businesses worldwide. Both purchases look like clever, forward-thinking moves to me.

PANW, CRWD, NET: Here’s Why Cybersecurity Stocks Sank on 4/9/26

Solomon OladipupoApr 10, 2026, 12:10 AM

Story Highlights

• Cybersecurity stocks fell on renewed AI jitters and Zscaler worries
• Analysts are upbeat on what Anthropic’s new initiatives mean for cybersecurity companies

 Cybersecurity stocks came under pressure again on Thursday amid renewed AI jitters, after notable gains on Wednesday following Anthropic’s debut of Project Glasswing, the AI startup’s defensive cybersecurity initiative. This came despite analysts’ bullish view of the initiative, even as BTIG flagged future demand concerns about industry peer Zscaler ZS -11.33% ▼ .

ZS stock earning dip

 Based on reports following Zscaler’s (ZS) second-quarter fiscal 2026 earnings release on February 26, 2026, the stock dipped despite beating earnings and revenue estimates, dropping over 5% to 9% in extended trading. 

While your analysis of the technical setup (8-day effort, price above 8-day moving average) suggests a strong bullish trend, the sharp post-earnings drop is a common "sell-the-news" event driven by specific fundamentals and market context: 

Reasons for the Disconnect (Why it Fell)

1. Lowered Revenue Outlook: Despite beating Q2 estimates, Zscaler lowered its full-year 2026 revenue guidance. For high-valuation, high-growth stocks like Zscaler, future guidance matters more than past performance.
2. Investor Sensitivity to Growth Rate: Investors are closely watching for signs of growth deceleration in the cybersecurity sector. If the raised guidance didn't meet the highest market expectations, the stock often drops.
3. High Valuation Premium: Zscaler trades at a high forward P/E ratio, leaving little room for error.
4. "Turnaround Tuesday" Reversal: While the market showed a "Turnaround Tuesday" rally on Feb 24 (where ZS jumped 5.4%), the overall market trend in February 2026 has been marked by caution around high-flying growth stocks. 

Technical Context (Your Observation)

• The Positive: Your observation is correct that the stock showed technical strength leading into the report, having recently cleared short-term moving averages.
• The Reversal: The earnings drop invalidates that short-term breakout, causing the stock to fall back below critical levels, as shown in the Feb 23, 2026 drop of -10.31% before a partial recovery. 

Disclaimer: This information is based on reports immediately following the Feb 26, 2026, earnings call and market dynamics may change.