Core Points - Cisco Systems and Oracle America are initiating layoffs that will collectively eliminate over 300 jobs in the Bay Area, as disclosed in WARN notices sent to the state's labor agency [1][4]. Group 1: Cisco Systems - Cisco is set to cut 221 jobs, with 157 layoffs in Milpitas and 64 in San Francisco, effective October 13 [5]. - The company has previously laid off approximately 2,870 jobs in the Bay Area from 2022 through August 2025 [3]. - The latest layoffs are permanent, and affected employees are not represented by a union and do not have bumping rights [2]. Group 2: Oracle America - Oracle will cut 101 positions in Santa Clara, with layoffs also taking effect on October 13 [5]. - Including previous cuts disclosed in 2022, Oracle has announced a total of 490 job reductions [4]. - Prior to the current announcement, Oracle had already decided to cut 188 jobs, with 143 in Redwood City and 45 in Pleasanton [5].

Core Insights - Cisco Systems (CSCO) shares have declined 6% following the fiscal Q4 2025 results, primarily due to slowing momentum in networking revenues, which grew 12% year over year to $7.63 billion [1][8] - The decline in stock price presents a potential buying opportunity for investors, especially considering Cisco's strong momentum in AI [1] Financial Performance - In fiscal Q4 2025, AI Infrastructure orders from webscale customers exceeded $800 million, leading to total revenues of $2 billion for fiscal 2025, which is double the management's original expectations [2] - Annual Recurring Revenues (ARR) reached $31.1 billion, up 5%, with product ARR growing by 8%. Total subscription revenues increased 3% year over year to $7.9 billion, accounting for 54% of total revenues [3] - Total Remaining Performance Obligations (RPO) increased 6% year over year to $43.5 billion, with product RPO growing 8% [3] Market Position and Comparisons - Year to date, CSCO shares have appreciated 11.8%, underperforming the broader Zacks Computer & Technology sector, which has appreciated 13.7%, and peers Broadcom (AVGO) and Arista Networks (ANET), which have appreciated 32.1% and 24.2%, respectively [4] - Cisco's shares are trading at a premium with a forward 12-month price/sales ratio of 4.65X, compared to the industry average of 4.14X, but are trading at a discount compared to Arista Networks and Broadcom [15][18] Future Guidance - For fiscal 2026, Cisco expects revenues between $59 billion and $60 billion, an increase from $56.7 billion in fiscal 2025, with projected non-GAAP earnings per share between $4 and $4.06 [8][13] - The Zacks Consensus Estimate for fiscal 2026 revenues is $56.58 billion, indicating a year-over-year growth of 5.2%, while the consensus for earnings is $4.02 per share, reflecting a growth of 5.5% [14] Strategic Initiatives - Cisco's aggressive push into AI and its growing security business are significant growth drivers, with strong demand for products like Cisco Secure Access and XDR [9][11] - The partnership with NVIDIA is expected to enhance Cisco's AI capabilities, offering solutions for AI-ready data center networks [12] Investment Outlook - An expanding portfolio positions Cisco for sustained growth in the evolving tech landscape, particularly in AI and security [21] - Cisco currently holds a Zacks Rank 2 (Buy), indicating a favorable investment opportunity for accumulation [21]

Core Insights - Cisco Systems' international operations are crucial for understanding its financial strength and growth potential [1][2] - The company's dependence on international markets is a key determinant of its earnings stability and growth path [2][3] Revenue Performance - For the quarter ending July 2025, Cisco reported total revenue of $14.67 billion, a year-over-year increase of 7.6% [4] - EMEA generated $3.65 billion, accounting for 24.8% of total revenue, which was a decline of 4.86% from the projected $3.83 billion [5] - APJC contributed $2.21 billion, representing 15% of total revenue, exceeding the consensus estimate of $2.1 billion by 5.27% [6] Future Projections - Analysts expect Cisco to report revenues of $14.75 billion for the current fiscal quarter, reflecting a 6.6% increase year-over-year [7] - For the full year, total revenue is projected at $59.58 billion, a 5.2% increase from the previous year, with EMEA and APJC expected to contribute $15.61 billion and $8.39 billion, respectively [8] Market Dynamics - Cisco's reliance on international markets presents both opportunities and challenges, necessitating close monitoring of international revenue trends [9] - Analysts are focused on tracking these trends to refine earnings predictions, considering the impact of geopolitical factors and domestic market positions [10]

Group 1: Company Overview - Cisco (NASDAQ: CSCO) is recognized as one of the largest and most significant networking companies globally, with potential benefits from the ongoing AI revolution [1]. Group 2: Investment Philosophy - The investment approach focuses on identifying companies with robust, consistent, and predictable cash flows, which facilitate accurate valuation and sensitivity analysis [1]. - The analysis incorporates both fundamental analysis and macroeconomic factors, acknowledging that these elements can influence market cycles and valuation [1]. Group 3: Market Engagement - The goal is to provide actionable investment ideas and engage in discussions within the investment community, catering to both novice and seasoned investors [1].

Investment Rating - The report maintains an "Outperform" rating for the communication industry [5][66]. Core Insights - The communication industry is experiencing robust growth driven by AI infrastructure and high demand for related products, particularly in the optical communication and AI server sectors [4][11][19]. - Major domestic optical communication companies are seeing rapid revenue growth, with significant contributions from high-speed optical modules [2][29][33]. - The three major telecom operators are showing stable performance with increasing dividends, indicating a solid long-term investment opportunity [4][48][55]. Summary by Sections Industry News Tracking - Industrial Fulian reported a revenue of 360.76 billion yuan in H1 2025, a year-on-year increase of 35.58%, with net profit rising by 38.61% [11]. - Lumentum's cloud computing and networking business grew by 66.5%, with Q4 revenue reaching $480.7 million, up 55.9% year-on-year [19][20]. - AVC's revenue for H1 2025 was 52.927 billion New Taiwan dollars, a 66.48% increase, driven by strong demand for AI server cooling products [23][24]. Domestic Optical Communication Companies - Huagong Technology's revenue in H1 2025 was 7.629 billion yuan, up 44.66%, with net profit increasing by 44.87% [29][30]. - Taichung Light's revenue reached 828 million yuan in H1 2025, a 62.49% increase, with net profit growing by 118.02% [33][34]. Telecom Operators - China Mobile reported a revenue of 543.8 billion yuan, a slight decline of 0.5%, but net profit increased by 5.0% [48]. - China Telecom's revenue was 269.4 billion yuan, up 1.3%, with net profit rising by 5.5% [48][55]. - The three major operators are increasing their dividend payouts, with a total proposed mid-term dividend of approximately 74.256 billion yuan [2][55]. Market Performance - The communication sector index rose by 7.66%, outperforming the Shanghai and Shenzhen 300 index, which increased by 2.37% [3][62]. - The optical module and device sectors showed strong performance, with significant gains in stock prices [63][64]. Investment Recommendations - The report suggests focusing on AI computing infrastructure, particularly in optical communication and domestic computing sectors [4][66]. - Long-term investment in the three major telecom operators is recommended due to their stable operations and increasing dividend yields [4][66].

Core Insights - Nvidia is expected to ship approximately 5 million Blackwell GPUs by 2025, which will require networking solutions from companies like Cisco, Arista, and HPE to function effectively [2] - Cisco's CEO Chuck Robbins reported that AI infrastructure orders from large-scale customers exceeded $800 million in Q4 of FY2025, with expectations to reach $2 billion in FY2025, significantly surpassing the previous target of $1 billion for Q4 FY2024 [2][5] - The demand for Ethernet switches is driven by the need for connectivity in AI clusters, with each GPU sale leading to the potential sale of 3 to 5 switch ports, depending on various factors [2][3] Networking Infrastructure Demand - For large AI clusters, the number of switches required can increase dramatically; a cluster of 128,000 GPUs may need around 5,000 switches, or up to 10,000 if older technology is used [3] - Optical products account for about one-third of Cisco's $800 million AI networking revenue in Q4, highlighting the importance of optical connectivity in AI infrastructure [3] - The AI networking market is growing rapidly, paralleling the pace of GPU releases from Nvidia and AMD [4] Market Opportunities - Cisco sees potential in traditional enterprise sectors for AI infrastructure, with optimism about increasing orders and a growing channel of customers seeking scalable and secure solutions [5] - Arista Networks anticipates that AI-related sales will account for approximately 17% of its projected $8.75 billion revenue for the year, indicating strong growth in this segment [5] - Nvidia's network sales grew by 64% quarter-over-quarter, reaching around $5 billion, driven by its Ethernet and InfiniBand products [6] Future Projections - The Dell'Oro Group predicts that AI networking will drive nearly $80 billion in network sales by 2030, suggesting a robust future for networking companies in this space [6]

Core Viewpoint - A major global bank downgraded its recommendation on Cisco Systems, leading to a nearly 5% decline in the company's stock price, contrasting with a modest 0.3% drop in the S&P 500 index [1] Group 1: Recommendation Change - HSBC analyst Stephen Bersey lowered his recommendation on Cisco from buy to hold, setting a price target of $69 per share [2] - This downgrade occurred shortly after Cisco released its earnings for the fiscal fourth quarter of 2025, which did not meet expectations [4] Group 2: Earnings Performance - Cisco's revenue increased by 8% year over year, reaching almost $14.7 billion, while non-GAAP profitability rose by 12% to $4 billion, both slightly exceeding consensus analyst estimates [6] - Despite these increases, the company's performance was viewed as underwhelming given the high expectations for tech companies involved in AI [7] Group 3: Market Sentiment - The analyst expressed disappointment in Cisco's performance, suggesting that the effects of de-stocking in its key networking segment were already evident [5] - The current market environment for tech stocks is described as unforgiving, which has influenced investor sentiment towards Cisco following the earnings report [7]

All right, since we were on the topic earlier of dumpster fires, let's take a look at Target. Um, the stock got downgraded to underperformed today at Bank of America. Stock that's down 24% year to date.They are losing out according to this note uh from Bank of America. Brenda, you own it. You still own it, right. Do we do take me through this feeling of why you still own it.>> Yep. So, we bought it in March of this year after it was down a significant amount already. Uh, knowing that this is a turnaround st ...

Group 1 - Cisco's latest earnings report showed a slight decline in stock price, but analysts remain optimistic about its growth, particularly in network business driven by AI infrastructure demand [1] - Bank of America analysts noted that Cisco's revenue growth of 7.6% exceeded market expectations of 7.3%, with earnings per share at $0.99, surpassing consensus by $0.01 [1] - Cisco's network business revenue grew by 12% year-over-year and 8% quarter-over-quarter, with AI infrastructure orders reaching $800 million for the quarter and $2.1 billion for the year [1] Group 2 - Analysts from KeyBanc maintained an "overweight" rating with a target price of $77, while also raising earnings forecasts [2] - Citigroup raised its target price from $71 to $80, maintaining a "buy" rating, citing positive AI business prospects [2] - The forecast for network AI orders is approximately $2.1 billion for fiscal year 2025, with AI-related revenue expected to reach $1 billion [2]

Investment Rating - The report maintains a Neutral rating for Cisco (CSCO) following its earnings report, with a downgrade to Neutral from a previous rating due to a significant miss in adjusted EBITDA and a below-expectations guidance [3][7]. Core Insights - Cisco's earnings report showed solid results but lacked significant surprises, leading to debates on whether it is a core long-term investment or likely to consolidate due to a lack of upward revisions [3][6]. - There are positive indicators for Cisco, including strong demand for WiFi 7 orders and a potential upgrade cycle for its enterprise campus products, which could provide tailwinds in the future [4][5]. - Investor sentiment around Nvidia (NVDA) remains high, with a notable increase in stock price since April, but recent performance has raised questions about its relative value and market positioning [12][13]. - The software sector is experiencing a cautious sentiment, with many stocks showing signs of being oversold, leading to frustration and confusion among investors regarding the lack of price support despite solid earnings [14][16][17]. - Apple (AAPL) has outperformed the Nasdaq 100 index recently, but September is historically a challenging month for the stock, raising concerns about future performance [19][20]. Summary by Sections Cisco (CSCO) - Cisco's Q4 EPS beat expectations by only 1%, the smallest percentage beat since April 2022, leading to discussions about its long-term viability as a core holding [3][6]. - The company is seeing early demand signals for campus refreshes, particularly with WiFi 7 orders increasing significantly [4][5]. - Security revenue growth was slightly below consensus, raising concerns about Cisco's ability to meet its previous outlook for security and observability [6][7]. Nvidia (NVDA) - Nvidia's stock has increased approximately 100% since April, but recent performance has lagged behind semiconductor indices, prompting discussions about its valuation [12][13]. - Investor confidence in the AI theme remains high, but there are tactical discussions about risk-reward dynamics ahead of upcoming earnings [12][19]. Software Sector - The software sector is currently viewed with caution, with many stocks experiencing significant declines and showing oversold conditions [14][16]. - There is a mix of sentiment among investors, ranging from frustration to optimism about potential opportunities in the sector [17][18]. Apple (AAPL) - Apple has recently outperformed the Nasdaq 100, but the upcoming September period is traditionally challenging for the stock, which could impact future performance [19][20]. Size Factor - The report highlights significant movements in the size factor, indicating notable volatility between small and large-cap stocks, marking one of the largest shifts in the past five years [21][22].