Cisco Systems (NASDAQ: CSCO) stock tumbled 9.7% through 10:10 a.m. ET Thursday despite beating on both top and bottom lines in its fiscal Q2 2026 earnings report last night. Analysts expected Cisco to earn $1.02 per share on $15.1 billion in sales, but Cisco actually earned $1.04 per share (adjusted for one-time items) on sales of $15.3 billion. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the st ...

Company Performance - Cisco Systems (CSCO) stock fell over 7% at the open due to a gloomy profit outlook despite a rise in sales, as the company expects margins to be squeezed by memory costs linked to AI datacenter spending [3] - McDonald's (MCD) shares nudged higher after the burger giant's earnings beat expectations [6] - Upcoming earnings reports to watch include Coinbase (COIN), Applied Materials (AMAT), and Rivian (RIVN), all scheduled for release after the market close [6] Economic Indicators - The Dow Jones Industrial Average (^DJI) increased by approximately 0.5%, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) both gained around 0.3% [2] - Jobless claims showed a smaller decline than expected, with nonfarm payrolls data indicating the US economy added twice as many jobs as anticipated in January, complicating expectations for Federal Reserve policy [5] - Attention is turning to the upcoming Consumer Price Index report, with hopes that a softer reading will indicate easing price pressures while maintaining economic growth [4]

Core Viewpoint - Cisco (CSCO.US) experienced a pre-market drop of over 6%, trading at $80.20, following a forecast for a decline in adjusted gross margin for Q3, indicating potential market caution due to lower profitability expectations and tariff impacts [1] Financial Performance - Cisco expects Q3 adjusted gross margin to be between 65.5% and 66.5%, reflecting a year-over-year decline of 2.1 to 3.1 percentage points, which is an increase in the decline compared to the previous quarter [1] - In Q2, Cisco reported a non-GAAP gross margin of 67.5%, down 1.2 percentage points from 68.7% in the same period last year [1] Market Impact - The guidance for lower gross margin ranges and explicit inclusion of tariff impacts in EPS and margin forecasts may lead to a more cautious pricing framework in short-term trading [1] - Cisco is increasing expenditures to develop new AI products, while the tech industry faces threats from memory chip shortages, contributing to rising costs [1]

EARNINGS RESULTS Q4 2025 February 2026 Forward-Looking Statements Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the first quarter of 2026 and beyond. Forward-looking statements include projections of sales, earnings, general economic conditions, market conditions, working capital, market shares, free cash flow, pricing levels, and effective tax rates. Belden disclaims any obligation to update any such statements to reflect later developments ...

Corporate Earnings and Market Reactions - Corporate earnings continue to attract investor attention, with notable results from companies like Restaurant Brands, Birkenstock, Howmet Aerospace, and Exelon [9] - AI-driven disruption is impacting companies, leading markets to penalize sectors perceived to face increased competition [9][10] - Software shares have been declining, with brokerage firms also reporting losses [10] Company-Specific Developments - AppLovin shares fell by 4.8% after disappointing fourth-quarter results, losing nearly a third of their value in the first six weeks of the year due to rising competition [6][10] - Cisco shares dropped 8% in premarket trading after reporting a quarterly adjusted gross margin that fell below expectations [6][10] - Applied Materials shares decreased by 1% following a $252 million settlement with the U.S. Department of Commerce for illegally exporting chipmaking equipment to China [8][10] Trade Relations - The U.S. and China may extend their trade truce for up to a year, with a meeting between President Trump and President Xi Jinping anticipated in early April [7][10] - The U.S. House of Representatives has narrowly supported a measure disapproving of Trump's tariffs on Canada, aiming to terminate the use of a national emergency for imposing punitive trade measures [7][10]

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or ...

Market Overview - Major U.S. indices closed lower, with the Dow Jones Industrial Average down 0.13% to 50,121.40, the S&P 500 finishing flat at 6,941.47, and the Nasdaq falling 0.16% to 23,066.46 [1] AppLovin Corporation - AppLovin stock decreased by 3.41% to close at $456.81, trading between an intraday high of $471.97 and a low of $438.18, remaining below its 52-week peak of $745.61 but above its 52-week low of $200.50 [2] McDonald's - McDonald's shares fell 0.85% to finish at $323.21, with an intraday high of $325.20 and a low of $320.81, just under its 52-week high of $328.06 and above its 52-week low of $283.47 [2] Cisco Systems - Cisco Systems stock eased 0.84% to close at $85.54, trading between an intraday high of $87.14 and a low of $85.12, hovering near a 52-week high of $88.18 and well above a 52-week low of $52.11; in after-hours trading, the stock fell 7.3% to $79.26 [3] - Cisco projected third-quarter revenue between $15.4 billion and $15.6 billion, exceeding estimates of $15.18 billion, and adjusted earnings of $1.02 to $1.04 per share, compared to estimates of $1.03 per share; the company also raised its fiscal 2026 revenue guidance to $61.20 billion to $61.7 billion from a prior outlook of $60.20 billion to $61 billion [4] QuantumScape Corporation - QuantumScape stock declined 1.34% to end at $8.82, with an intraday high of $9.13 and a low of $8.60, trading well below its 52-week high of $19.07 but above its 52-week low of $3.40; shares fell nearly 10.5% to $7.89 in extended trading [5] - The company reported a fourth-quarter loss of 17 cents per share, better than the expected 18-cent loss; capital expenditures totaled $12.3 million for the fourth quarter and $36.3 million for the full year 2025, with customer billings reaching $19.5 million for the year [6] AST SpaceMobile - AST SpaceMobile shares increased by 0.68% to close at $96.92, trading between a session high of $102.85 and a low of $93.20, still below its 52-week high of $129.87 but far above its 52-week low of $18.22 [7] - Cisco stock has a Momentum ranking in the 81st percentile and a Value ranking in the 18th percentile according to Benzinga Edge Stock Rankings [7]

Core Insights - The article discusses the best Roth IRA stocks to invest in, highlighting the growing popularity of Roth IRAs among younger investors and the significant amount of assets held in these accounts [1][2][3]. Roth IRA Overview - A Roth IRA is a tax-advantaged retirement savings account that allows individuals to control their contributions and investments directly [1]. - As of year-end 2023, Americans held $13.6 trillion in individual retirement accounts, with $1.4 trillion in Roth IRAs, indicating a substantial market presence [3]. Investor Demographics - Younger investors are increasingly opening Roth IRAs, with 34% of Roth IRA investors under 40 years old compared to only 17% of traditional IRA investors in the same age group [3]. Investment Methodology - The article outlines a methodology for selecting stocks, focusing on companies with long-term growth potential, dividend growth history, solid fundamentals, and positive analyst coverage [6]. - The selected stocks are ranked based on their popularity among hedge fund investors, with a total of 13 companies highlighted [6]. Hedge Fund Interest - The article emphasizes the strategy of mimicking top hedge fund stock picks, which has historically outperformed the market, with a reported return of 427.7% since May 2014 [7]. Company Highlights - **PepsiCo, Inc. (NASDAQ:PEP)**: Barclays raised its price target from $148 to $160 following the company's earnings report, with a focus on affordability for low- and middle-income consumers [9][10]. The company is implementing pricing strategies and marketing pushes for brands like Gatorade and Quaker [12][14]. - **Cisco Systems, Inc. (NASDAQ:CSCO)**: Introduced a new chip designed to enhance data movement in large data centers, positioning itself in the competitive AI infrastructure market projected at $600 billion [15]. The new chip is expected to improve AI computing tasks by 28% and is manufactured using advanced 3-nanometer technology [17][18].

Economic Indicators - The U.S. jobs report showed a significant slowdown in hiring, with job gains dropping from an average of 49,000 new jobs a month to just 15,000, indicating a potential impact on Federal Reserve rate decisions [3][6][7] - The average annual job addition for 2025 was revised down to 180,000, the lowest since 2003, suggesting a weakening labor market [6][14] - The Federal Reserve is likely to keep interest rates on hold for now, with traders pushing the timeline for the next rate cut to July [4][12] Market Reactions - The S&P 500 initially rose following the jobs report but later lost momentum, reflecting a mixed sentiment in the market [15][70] - Treasury yields increased, particularly at the short end of the yield curve, indicating a sell-off in the treasury market [2][72] - Investors are rebalancing portfolios, moving from equities to gold, as they perceive the economy to be in good shape despite sluggish hiring [17][19] Corporate Earnings and Trends - Companies like McDonald's and Robinhood are under scrutiny for their earnings reports, with Robinhood facing pressure due to lower crypto revenue [4][23][25] - Novo Nordisk is actively pursuing acquisitions and has filed a lawsuit against a competitor for patent infringement, indicating a competitive landscape in the pharmaceutical sector [44][58][66] - The GLP-1 drug market is a focal point, with Novo Nordisk's recent product launch showing strong uptake, suggesting potential for market expansion [48][63] Investment Strategies - Analysts suggest that the current market conditions may favor international value stocks as a diversification strategy, especially as U.S. growth stocks face scrutiny [78][82] - The focus on AI and technology is leading to a reevaluation of companies within the software sector, with some investors seeking opportunities amidst a broader sell-off [77][78] - The pharmaceutical industry, particularly in diabetes and obesity treatments, is expected to see continued interest and potential acquisitions as companies look to expand their portfolios [66][68]

Cisco also highlighted its recurring revenue profile. Patterson said total subscription revenue was $7.8 billion , representing 51% of total revenue, while total software revenue was $5.7 billion , up 2% . Total RPO was $43.4 billion , up 5% , and total ARR ended the quarter at $31 billion , up 3% (product ARR up 6% ).By segment, Patterson said Networking grew 21% on AI infrastructure and a campus refresh, with double-digit growth in campus switching, data center switching, wireless, service provider routin ...