Core Insights - Okta (OKTA) focuses on identity and access management, while Cisco Systems (CSCO) emphasizes Threat Intelligence, Detection, and Response offerings [1] - Global end-user spending on information security is projected to reach $213.025 billion in 2025, growing from $193.408 billion in 2024, with a year-over-year growth of 12.5% expected in 2026 [2] Okta Overview - Okta's new offerings, such as Okta Identity Governance and Identity Threat Protection with Okta AI, are driving market share growth and top-line revenue [3] - The company has a strong partner ecosystem, including major players like Amazon Web Services and Microsoft, enhancing its market position [4] - Okta is developing an end-to-end secure identity fabric for non-human identities (NHIs), providing visibility and governance similar to human identities [5] - For fiscal 2026, Okta anticipates revenues between $2.875 billion and $2.885 billion, reflecting a growth rate of 10-11%, lower than the 15% growth reported in fiscal 2025 [6] Cisco Overview - Cisco's security business is experiencing strong demand, with mid-single-digit growth in orders for Cisco Secure Access and XDR in Q4 of fiscal 2025 [7] - AI Infrastructure orders from webscale customers exceeded $800 million in Q4 of fiscal 2025, contributing to total revenues of $2 billion, which is double the initial expectations [8] - Cisco's partnership with NVIDIA aims to create AI-ready data center networks, enhancing its product offerings and market competitiveness [9] - For fiscal 2026, Cisco expects revenues between $59 billion and $60 billion, indicating a growth of 5.2% over fiscal 2025 [10] Stock Performance and Valuation - Year-to-date, Cisco shares have appreciated by 14.3%, while Okta shares have returned 14.2% [11] - Both companies are currently considered overvalued, with Cisco trading at a forward Price/Sales ratio of 4.47X compared to Okta's 5.17X [14] - The Zacks Consensus Estimate for Cisco's fiscal 2026 earnings is $4.04 per share, reflecting a 6% increase, while Okta's estimate is $3.36 per share, indicating a 19.6% increase [18][19] Conclusion - Cisco's strong security portfolio and growing AI order backlog provide a competitive edge over Okta, which is gaining traction with its solutions and partner base [20]

Core Insights - Cisco Systems (CSCO) shares are currently trading at a premium with a Value Score of D, reflecting a forward 12-month price/sales ratio of 4.45X, which is higher than the Zacks Computer Networks industry's 4.16X but lower than Arista Networks (18.19X) and Broadcom (21.43X) [1][4][18] Stock Performance - Year-to-date (YTD), CSCO shares have appreciated by 13.8%, underperforming the broader Zacks Computer & Technology sector (15.9%) and peers Broadcom (46.1%) and Arista Networks (28.4%) [4][7] - Since the fourth-quarter fiscal 2025 results were reported on August 13, CSCO shares have dropped by 4.4%, attributed to slowing momentum in networking revenues, which grew by 12% year-over-year to $7.63 billion [5][6] Growth Drivers - AI Infrastructure orders from webscale customers reached $2 billion in fiscal 2025, doubling management's forecast, with over $800 million in orders reported in the fourth quarter [7][9] - Cisco's partnership with NVIDIA is expected to enhance AI capabilities, integrating Cisco Nexus switches with NVIDIA's Spectrum-X architecture for improved networking solutions [11][12] - Networking product orders have shown double-digit growth for four consecutive quarters, driven by demand in webscale infrastructure, switching, enterprise routing, and industrial IoT [13] Security Business - Cisco's security business is experiencing strong demand, with mid-single-digit growth in orders for Cisco Secure Access, Hypershield, and XDR, and a reported 14% year-over-year growth in new logos for Splunk [14] Financial Guidance - For fiscal 2026, Cisco expects revenues between $59 billion and $60 billion, up from $56.7 billion in fiscal 2025, with non-GAAP earnings projected between $4.00 and $4.06 per share [16] - The Zacks Consensus Estimate for fiscal 2026 revenues is $56.58 billion, indicating a year-over-year growth of 5.2%, while earnings are expected to grow by 6% to $4.04 per share [17] Market Position - Cisco's expanding portfolio and focus on AI and security position the company for sustained growth in a changing tech landscape, despite facing challenges from stretched valuations and competitive pressures [18][19]

Core Insights - Cisco Systems' security business is experiencing strong demand, particularly for Cisco Secure Access, Hypershield, and XDR, with mid-single-digit order growth in Q4 fiscal 2025 [1][2][10] - Security revenues reached $1.95 billion, reflecting a 9% year-over-year increase, driven by offerings from Splunk and SASE [2][10] - Cisco's collaboration with NVIDIA enhances its leadership in security by integrating Nexus switches with Spectrum-X architecture [3] Security Business Performance - Cisco's security revenues were $1.95 billion, up 9% year-over-year, with significant contributions from Splunk and SASE [2][10] - The company added 750 new customers in the reported quarter, with Splunk synergies contributing to a 14% year-over-year growth in new logos [1][10] - Excluding sluggish U.S. federal order growth, security order growth in the rest of the world increased by double digits in Q4 [2] Future Outlook - Cisco expects Q1 fiscal 2026 revenues between $14.65 billion and $14.85 billion, indicating a 6.7% growth from the previous year [4][10] - The Zacks Consensus Estimate for Q1 fiscal 2026 is set at $14.77 billion [4] - Earnings per share for Q1 fiscal 2026 are projected between 97 cents and 99 cents, suggesting a 7.7% year-over-year growth [14] Competitive Landscape - Cisco faces increasing competition from Broadcom and Okta in the enterprise security sector [5] - Broadcom's security offerings accounted for 44% of its revenues in Q2 fiscal 2025, with new tools aimed at improving security and operational efficiency [6] - Okta's AI-powered capabilities are gaining traction, enhancing its product offerings in identity security [7] Stock Performance and Valuation - Cisco shares have appreciated 16.7% year-to-date, outperforming the broader Zacks Computer and Technology sector's return of 12.9% [8] - Cisco's forward 12-month price/sales ratio is 4.59X, compared to the industry average of 4.31X, indicating potential overvaluation [12]

Industry Overview - The Zacks Computer - Networking industry is poised for growth driven by advancements in cloud computing, network security, big data, and next-gen connectivity, particularly due to the increasing applications of AI technology [1] - The demand for AI workloads and hyperscale data centers is leading to significant investments in high-speed interconnects, optical networking, and Ethernet switches, with companies aiming to leverage the multi-billion-dollar AI infrastructure opportunity [1] - The rapid deployment of 5G technology is enhancing the Internet of Things (IoT), Advanced Driver Assistance Systems, AR/VR devices, and 5G smartphones, thereby increasing the need for robust networking infrastructure [1] Trends Influencing the Industry - The Wi-Fi 7 upgrade cycle is expected to stimulate demand for innovative networking products, benefiting major players like Cisco Systems, Extreme Networks, and RADCOM [2] - The industry is experiencing heightened uncertainty due to global macroeconomic conditions and volatile supply-chain dynamics, with some telecom operators reducing or delaying capital expenditures [2][7] - The growing popularity of smart home products and IoT devices is driving innovation in networking technologies, including network virtualization and Software-Defined Networking [4] Performance Metrics - The Zacks Computer - Networking industry has outperformed the S&P 500 Composite and the broader Zacks Computer and Technology sector, gaining 31.3% over the past year compared to the sector's 18.3% and the S&P 500's 13.9% [11] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.27X, which is lower than the S&P 500's 22.52X and the sector's 27.18X [14] Company Highlights - **Extreme Networks**: The company reported a 20% year-over-year revenue growth in the last quarter, driven by strong demand for its AI-driven cloud networking solutions. Its SaaS annual recurring revenues rose 24.4% year-over-year to $207.6 million [18][19] - **Cisco Systems**: Cisco is enhancing its AI capabilities across its security and collaboration platforms, with notable developments including the launch of AI-driven solutions and partnerships with NVIDIA to create AI-ready data center networks [23][24] - **RADCOM**: The company focuses on cloud-native, automated service assurance for 5G networks and aims for a revenue growth target of 15%-18% for the full year, translating to a midpoint projection of $71.1 million [28][31]

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 and Dell Technologies are leading providers of AI-powered enterprise infrastructure solutions [2][3] - The demand for AI infrastructure is driving significant growth in both companies, with Cisco securing over $1 billion in AI infrastructure orders and Dell shipping $1.8 billion in AI servers in Q1 [9][13] - IDC projects AI infrastructure spending to exceed $200 billion by 2028, with a significant portion allocated to servers with embedded accelerators [4] Company Performance - Cisco's stock has appreciated 16.2% year to date, while Dell's shares have increased by 11% [5] - Cisco's security business is thriving, with strong demand for its security solutions and a growing customer base [11][12] - Dell's PowerEdge XE9680L AI-optimized server is in high demand, contributing to a healthy backlog of $14.4 billion [13] Market Trends - Global IT spending is forecasted to reach $5.61 trillion by 2025, with data center systems expected to grow by 23.2% [4] - Enterprises with large-scale hyperscale data centers will account for over 70% of spending on AI-optimized servers by 2025 [4] Valuation and Investment Appeal - Dell Technologies is considered undervalued with a Price/Sales ratio of 0.81X compared to Cisco's 4.61X [18] - Dell holds a Zacks Rank 1 (Strong Buy), while Cisco has a Zacks Rank 3 (Hold), indicating a stronger investment appeal for Dell [21][22]

Core Insights - Cisco Systems (CSCO) shares closed at $69.27, slightly below the 52-week high of $69.78, with a year-to-date appreciation of 17%, outperforming the broader sector and peer Extreme Networks [1][6] - The company's aggressive push into AI and growing security dominance are significant growth drivers, with over $1 billion in AI infrastructure orders secured ahead of schedule [2][6] - Cisco is expanding its AI portfolio for data centers with new solutions and partnerships, particularly with NVIDIA, which is expected to enhance its market position [3][9] Stock Performance - CSCO stock is trading above both the 50-day and 200-day moving averages, indicating a bullish trend [6] - The stock's year-to-date increase of 17% is notable, with strong demand in the security sector contributing to its performance [6][8] Security Business Growth - Cisco's security business is experiencing strong demand, with double-digit growth in orders for solutions like Cisco Secure Access and XDR [8] - The partnership with ServiceNow aims to enhance AI risk management and governance, further solidifying Cisco's position in the security market [10] Financial Guidance - For fiscal 2025, Cisco expects revenues between $56.5 billion and $56.7 billion, an increase from previous guidance, with non-GAAP earnings projected between $3.77 and $3.79 per share [13][14] - The Zacks Consensus Estimate for fiscal 2025 revenues is $56.59 billion, indicating a year-over-year growth of 5.18% [14] Valuation Concerns - Cisco shares are currently trading at a premium, with a forward 12-month price/sales ratio of 4.65X, higher than the industry average [15][18] - The stock is considered overvalued, which may lead to caution among investors [15][20] Long-term Prospects - Cisco's expanding portfolio and focus on AI and security position it well for sustained growth in the tech landscape [19] - Despite current challenges, the long-term outlook remains positive for investors holding the stock [19]

Core Insights - Broadcom (AVGO) and Cisco Systems (CSCO) are significant players in the enterprise security software market, offering a range of solutions including endpoint, network, and identity security [2] - Enterprise spending on cybersecurity is projected to grow 14% to $118.5 billion by 2025, driven by demand for Generative AI and cloud adoption [3] - Both companies are experiencing strong stock performance, with Broadcom and Cisco shares appreciating 10.3% and 9.8% year to date, respectively [4] Broadcom (AVGO) Insights - Broadcom's security offerings are part of its broader Infrastructure Software segment, which accounted for 44% of revenues in Q2 fiscal 2025, with revenues rising 25% year over year to $6.6 billion [8] - The company anticipates infrastructure software revenues of approximately $6.7 billion in Q3 fiscal 2025, reflecting a 16% year-over-year increase [9] - Broadcom's focus on AI-powered security solutions is evident with the introduction of VMware vDefend and Incident Prediction features [10][11] - The company expects AI revenues to increase by 60% year over year to $5.1 billion in Q3 fiscal 2025, supported by strong demand for custom AI accelerators [20] Cisco Systems (CSCO) Insights - Cisco's security revenue surged 54% year over year in Q3 fiscal 2025, driven by strong demand for its security solutions and a significant multiyear deal with a financial services company [12][13] - The company is integrating AI across its security and collaboration platforms, enhancing its competitive position [12] - Cisco's security business is benefiting from the acquisition of Snap Attack and the introduction of solutions like Cisco Secure AI Factory [14] - The consensus estimate for Cisco's fiscal 2025 earnings has increased by 1.6% to $3.79 per share, indicating a 1.61% growth over fiscal 2024 [15] Valuation Insights - Both Broadcom and Cisco are considered overvalued, with Broadcom trading at a forward Price/Sales ratio of 17.48X, significantly higher than Cisco's 4.38X [17] - Despite the valuation concerns, both companies have consistently beaten earnings estimates in the past four quarters, with Cisco showing a slightly better average surprise of 3.94% compared to Broadcom's 3.2% [16]

Core Insights - Cisco Systems (CSCO) is expanding its AI portfolio for data centers with new solutions, including the Unified Nexus Dashboard and Cisco Intelligent Packet Flow, while leveraging its collaboration with NVIDIA to enhance its AI infrastructure capabilities [1][9][10] - Cisco has secured over $1 billion in AI infrastructure orders for fiscal 2025, indicating strong demand and growth potential [1][8] - The company's security revenues surged by 54% year-over-year in Q3, reflecting robust demand for its security solutions [3][12] AI Portfolio Expansion - The Unified Nexus Dashboard will consolidate services across various networks into a single interface, set to be released in July 2025 [2] - Cisco Intelligent Packet Flow utilizes real-time telemetry for proactive issue detection, available from June 10 [2] - New 400G BiDi optics are expected to launch in the second half of 2025, further enhancing Cisco's data center offerings [2] Financial Performance - Total product orders increased by 20% year-over-year, with networking product orders growing by double digits [3] - Cisco's guidance for fiscal 2025 anticipates revenues between $56.5 billion and $56.7 billion, an increase from previous estimates [13] - The Zacks Consensus Estimate for fiscal 2025 revenues is $56.59 billion, indicating a year-over-year growth of 5.18% [14] Stock Performance - Cisco shares have appreciated by 8.4% year-to-date, although this is below the Zacks Computer & Technology sector's return of 14.3% [4] - The stock is currently trading at a premium, with a forward price/sales ratio of 4.32, higher than the industry average [15] Strategic Collaborations - The partnership with NVIDIA aims to create AI-ready data center networks, enhancing Cisco's security and infrastructure capabilities [9][10] - Cisco's integration of its solutions with NVIDIA's technology is expected to simplify and secure AI infrastructure deployment [9][10] Security Business Growth - Cisco's security business is experiencing significant growth, with strong demand for solutions like Secure Access and Hypershield [12] - The introduction of Agentic AI across security and collaboration platforms is a key strategy for improving customer experience [11]

Core Viewpoint - Cisco Systems (CSCO) shares are currently trading at a premium compared to its industry peers, with a Value Score of D indicating potential overvaluation [1][15]. Financial Performance - Cisco shares have appreciated 13.6% in the past month, underperforming the industry average of 14.3% and the Zacks Computer & Technology sector's return of 15.5% [4]. - In the third quarter of fiscal 2025, Cisco's total product orders grew 20% year over year, with networking product orders increasing in double digits [8]. - Cisco expects fiscal 2025 revenues to be between $56.5 billion and $56.7 billion, an increase from previous guidance, with non-GAAP earnings projected between $3.77 and $3.79 per share [13]. Market Position - Cisco is trading at a forward 12-month price/sales ratio of 4.3X, higher than the Zacks Computer Networks industry's 4.11X, and significantly above Extreme Networks (1.75X) and NETGEAR (1.23X) [1]. - Cisco's security revenues surged 54% year over year, while networking revenues increased by 8% [7]. Strategic Initiatives - Cisco has expanded its portfolio with AI factory architecture developed in collaboration with NVIDIA, leading to over $600 million in AI infrastructure orders in Q3 fiscal 2025 [9][10]. - The company is leveraging Agentic AI to enhance customer experience, with notable developments including the launch of the Renewals Agent and a new Assistant for Network Change Management [11]. Competitive Landscape - Cisco's security business is experiencing strong demand, adding over 370 customers in the reported quarter, bolstered by solutions like Cisco Secure Access and Hypershield [12]. - Despite the positive developments, Cisco faces challenges from a tough macroeconomic environment and stiff competition in the networking and security sectors [16].