We recently published Market in Turmoil but These 10 Stocks Are on Fire. Cisco Systems, Inc. (NASDAQ:CSCO) is one of the best-performing stocks on Thursday. Cisco Systems propelled to a new 25-year high on Thursday as investor sentiment was bolstered by its strong earnings performance for the first quarter of fiscal year 2026, which exceeded its own expectations. At intra-day trading, the stock soared to its highest price of $79.50 before trimming gains to end the day just up by 4.62 percent at $77.38 ap ...

Group 1 - Futures for major stock indexes, including the Dow Jones Industrial Average, traded modestly lower after the government shutdown ended with President Trump's signing of a funding bill [1] - Walt Disney reported earnings that contributed to its decline in the stock market, indicating potential challenges ahead for the company [1] - Cisco's earnings exceeded expectations, and its outlook is above market views, driven by strong orders in the AI sector [4] Group 2 - Disney is inching toward a turnaround in 2026, with plans to boost content spending, which may impact its financial performance positively in the long term [4] - The streaming video industry is expanding, with Disney increasing its media footprint in collaboration with Netflix [4] - The stock market is observing a week ahead focused on Dow stocks and potential rebounds, indicating a volatile market environment [4]

Group 1: Market Overview - Major U.S. equities indexes experienced a decline, with technology shares significantly impacting the Nasdaq, which fell nearly 2% [1] - The S&P 500 and Dow Jones Industrial Average also reported lower performance following the end of the longest federal shutdown in U.S. history [1] Group 2: Company Performance - Cisco Systems (CSCO) saw its stock surge over 4% after the company raised its full-year profit outlook [3] - The Walt Disney Co. (DIS) shares dropped 9% due to weaker-than-expected revenue, particularly in its linear TV networks business [2] - Flutter Entertainment (FLUT) stock fell 11% after the company revised its full-year revenue and adjusted EBITDA forecasts downward [2] - WEBTOON Entertainment (WBTN) shares plummeted 25% after projecting a decline in fourth-quarter revenue [2] - Sealed Air (SEE) shares soared 19% following reports of potential talks with private-equity firm Clayton Dubilier & Rice for a private acquisition [3] - Firefly Aerospace (FLY) shares jumped 17% after posting better-than-expected results and a positive full-year revenue projection [3] Group 3: Commodity and Currency Movements - Oil futures rose nearly 1%, trading just above $59 per barrel [3] - Gold futures remained relatively unchanged at around $4,200 per ounce [3] - The yield on the 10-year Treasury note increased to 4.10% [3] - The U.S. dollar weakened against the euro, pound, and yen [3] - Cryptocurrency prices were mixed, with Bitcoin trading under $101,000 [3]

Core Viewpoint - US stocks experienced a decline on Thursday as the recent market rotation lost momentum, despite the Dow reaching new highs [1] Group 1: Market Performance - The Dow Jones Industrial Average fell approximately 94 points, translating to a decrease of 0.2% [1] - The S&P index also showed signs of decline, indicating a broader market pullback [1]

Core Insights - Cisco (CSCO.US) shares rose nearly 7% to $78.76 in pre-market trading following the release of better-than-expected Q1 FY2026 earnings and an optimistic outlook, indicating progress in capturing more AI-related spending [1] Financial Performance - Cisco reported Q1 FY2026 revenue of $14.9 billion, an 8% year-over-year increase, surpassing analyst expectations of $14.8 billion [1] - The company's Non-GAAP net income was $4 billion, a 9% increase year-over-year, with earnings per share (EPS) of $1.00 compared to $0.91 in the same period last year, exceeding the consensus estimate of $0.98 [1] Future Guidance - Cisco raised its full-year FY2026 revenue guidance to between $60.2 billion and $61 billion, up from the previous forecast of $59 billion to $60 billion [1] - The company also increased its Non-GAAP EPS guidance for the full year to a range of $4.08 to $4.14, compared to the prior estimate of $4.00 to $4.06 [1]

Market Overview - U.S. stock futures showed mixed movements following a mixed trading session on Wednesday, with major indices experiencing slight fluctuations [1] - The 10-year Treasury bond yielded 4.08%, while the two-year bond was at 3.57%, indicating market expectations for potential interest rate cuts by the Federal Reserve [2] Stock Performance - Cisco Systems Inc. (NASDAQ:CSCO) saw a premarket increase of 7.04% after reporting positive financial results for the first quarter, maintaining a stronger price trend across various time frames [7] - Walt Disney Co. (NYSE:DIS) was up 0.29% ahead of its earnings report, with analysts predicting earnings of $1.04 per share on revenue of $22.75 billion, also showing a strong price trend [8] - Applied Materials Inc. (NASDAQ:AMAT) rose 0.55% with expected earnings of $2.10 per share on revenue of $6.67 billion, maintaining a strong price trend [8] - SoundThinking Inc. (NASDAQ:SSTI) fell 3.32% after disappointing third-quarter results and lowering its FY25 sales guidance, reflecting a weaker price trend [8] - Dlocal Ltd. (NASDAQ:DLO) dropped 11.37% despite beating third-quarter estimates, as its gross profit margin declined to 37% from 42% year-over-year, indicating a weaker price trend in the short and medium terms [8] Sector Performance - Most sectors on the S&P 500 closed positively, with healthcare, financial, and materials stocks recording the largest gains on Wednesday [5] Analyst Insights - BlackRock maintains an "overweight" view on U.S. equities, supported by a softening labor market that may allow the Federal Reserve to cut interest rates, which could benefit U.S. stocks and the AI sector [9] - The firm emphasizes that AI developments are crucial for corporate earnings, which are seen as a key factor supporting U.S. market valuations compared to other developed markets [10] Economic Data - Upcoming economic data releases, including October's CPI and initial jobless claims, will be delayed due to the recent government shutdown, impacting market expectations [11][13]

Core Insights - A $10,000 investment in the Schwab U.S. Dividend Equity ETF since its inception in 2011 would be worth approximately $51,000 today, highlighting its potential for capital appreciation [1][15] - A study by Dimensional Fund Advisors indicates that income-focused portfolios have a significantly lower failure rate for retirees compared to growth-focused portfolios, suggesting the importance of income stability in retirement planning [2][3] Fund Overview - The Schwab U.S. Dividend Equity ETF aims to track the Dow Jones U.S. Dividend 100 Index, which includes 103 high-yielding dividend stocks selected for their fundamental strength [4] - As of the latest data, the ETF has a dividend yield of 3.8%, which is more than triple that of the S&P 500 [5] Holdings and Performance - The ETF's largest holding is Cisco Systems, comprising 4.43% of the portfolio, with a dividend yield of 2.2% and a history of 14 years of dividend increases [7][9] - AbbVie and Amgen are also significant holdings, with AbbVie having raised its dividend for 54 consecutive years and Amgen maintaining a 3.2% yield [10][11] - The ETF has underperformed the S&P 500 since its inception, with an annualized total return of 12.2% compared to the S&P 500's 15.2% [14] Sector Exposure - The ETF has rules limiting sector weightings to no more than 25%, with the largest sector being energy at 19.3% and consumer staples at 18.5%, mitigating risks associated with overexposure to any single sector [13] Valuation and Investment Appeal - The ETF's price-to-earnings ratio is 17, significantly lower than the S&P 500's ratio of 31, indicating it may be undervalued [16] - With a low expense ratio of 0.06%, the ETF is positioned as an attractive option for investors seeking income and capital appreciation [16]

Core Insights - Cisco Systems shares increased by over 8% in early Frankfurt trading following the company's raised full-year forecasts for profit and revenue [1] Company Summary - Cisco Systems has updated its full-year forecasts, indicating a positive outlook for both profit and revenue [1]

Core Viewpoint - Cisco's Q1 revenue reached $14.88 billion, representing an 8% year-over-year growth, with non-GAAP EPS of $1.00, up 10%, both exceeding Wall Street expectations. This marks the fourth consecutive quarter of revenue growth for the company [1][2][5]. Financial Performance - Q1 revenue was $14.88 billion, an 8% increase year-over-year; non-GAAP EPS was $1.00, a 10% increase, surpassing guidance [5]. - Q2 revenue guidance is set at $15.0-15.2 billion, exceeding market expectations of $14.6-14.7 billion; full-year revenue guidance has been raised to $60.2-61.0 billion [5]. - GAAP gross margin was 65.5%, and non-GAAP operating margin was 34.4%, both above the guidance range [5]. - Product orders grew 13% year-over-year, with network product orders achieving double-digit growth for the fifth consecutive quarter [5]. AI Infrastructure Orders - AI infrastructure orders reached $1.3 billion, significantly accelerating from $800 million in the previous quarter, indicating Cisco's growing relevance in the AI sector [9]. - The company is enhancing its offerings by upgrading chips and network devices to better connect server racks and data centers for complex AI tasks [9]. - Cisco launched a new Ethernet switch based on NVIDIA chips to compete effectively in the market [9]. Core Business Developments - The networking business showed strong performance, with revenue increasing 15% to $7.77 billion, surpassing analyst expectations of $7.47 billion [9]. - All technology categories within the campus network (switching, routing, wireless, and IoT) experienced accelerated growth in Q1, with new solutions like smart switches and WiFi 7 products growing faster than previous releases [9]. Strategic Focus - Cisco is focusing on upgrading AI network devices and has launched new Ethernet switches based on NVIDIA chips [10]. - The company plans to strengthen its software and security business through a $28 billion acquisition of Splunk, aiming for business diversification [10]. - There is a focus on profitable growth, capital returns, and strategic investments [10].

Group 1 - Cisco Systems, Inc. (CSCO) is characterized as an "old" tech company that has recently reported appealing quarterly earnings results, indicating a positive performance trend [1] - Although not the highest-growth tech company, Cisco is experiencing steady growth and has a favorable outlook for the future [1] - The focus of Cash Flow Club is on businesses with strong cash generation, emphasizing the importance of buying companies at the right time for potential rewards [1]