Cisco Stock Craters Amid AI Infrastructure Boom
Cisco Systems, the networking and cybersecurity giant, saw its stock tumble by 8.8% on Thursday despite delivering record quarterly numbers and a stronger-than-expected forecast for the year ahead.
The company's revenue surged 18% to $17.3 billion in the fiscal fourth quarter, with adjusted earnings climbing 23% to $1.22 per share.
Cisco's networking revenue jumped 28%, and product orders shot up 35%. The AI infrastructure boom was a major driver of this growth, with hyperscaler AI-infrastructure orders hitting $4 billion in the quarter and $9.3 billion for the full year.
However, investors are concerned about Cisco's profit margins, which fell by 210 basis points to 66.3%. The company's first-quarter outlook suggests that these margins will continue to be under pressure.