AI Networking Giants Cisco and Broadcom Deliver Strong Earnings, But Stocks Plummet

Cisco and Broadcom both delivered strong earnings reports that surpassed analyst estimates, yet both experienced significant stock price declines shortly thereafter. Cisco's stock fell approximately 8.4% on August 13 after reporting its Q4 FY2026 results, despite an impressive 18% year-over-year revenue growth to $17.252 billion.

The market's apprehension focused on forward guidance deemed 'conservative' by some analysts, prompting concerns about 'peak growth,' and an explicit link between growing hyperscaler hardware shipments and a compressing non-GAAP gross margin.

Broadcom also saw its stock plunge roughly 12-14% around its Q2 FY2026 report, which showcased robust performance with revenue surging 48% year-over-year to $22.187 billion and AI semiconductor revenue more than doubling to $10.8 billion.