Cisco Slumps as Valuation Worries Trump Quarterly Gains

Cisco Systems, the tech giant behind networking hardware and software, has seen its shares slide 8.88% over the past week. Despite posting impressive quarterly results, with non-GAAP earnings per share rising by more than 23%, investors are growing cautious about the stock's valuation.

According to Abhishek Shukla of HSBC, Cisco's growth may already be priced in, and he expects earnings to peak around 2027 before cooling off. This view has contributed to the recent decline in share price, which some see as a buying opportunity given the company's strong fundamentals.

Others, such as BofA's Tal Liani, remain bullish on Cisco, pointing to surging demand for networking and cloud infrastructure. The company expects hyperscaler revenue to nearly double again in fiscal 2027, suggesting ongoing support for growth. For investors, the current market reaction reflects a tug-of-war between impressive business momentum and concerns about valuation risk.