Veteran analyst drops a shocker on Cisco

Core Viewpoint - Cisco (CSCO) reported strong quarterly results with record revenue and double-digit growth, but its share price fell due to concerns over gross margins [1][5]. Financial Performance - Revenue reached $15.3 billion, reflecting a 10% year-over-year increase [7]. - Non-GAAP EPS was reported at $1.04 [7]. - Networking revenue was $8.29 billion, up 21% year-over-year [7]. - Remaining Performance Obligations (RPO) stood at $43.4 billion, an increase of 5% [7]. Market Reaction - Following the earnings release, CSCO shares fell approximately 7% in extended trading due to a focus on adjusted gross margins [5]. - The gross margin was reported at 67.5%, down 1.2% year-over-year [5]. - Despite the sell-off, Bank of America (BofA) noted that Cisco's numbers were better than the market's perception, with a conservative guidance outlook [2][8]. Guidance and Future Outlook - Cisco's 3Q revenue guidance indicates around 9.5% year-over-year growth, surpassing market expectations of 7.3% [9]. - The implied guidance for 4Q suggests only about 1.4% quarter-over-quarter growth, which is considered light given normal seasonality [10].