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Why Cisco Systems Stock Slumped Today

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]