Cisco Stock Plunges Despite Record Numbers

Cisco Systems, the networking and cybersecurity giant, reported record numbers but saw its stock plummet anyway. Shares dropped 8.4% on Thursday and another 2% on Friday morning despite revenue jumping 18% to $17.3 billion and adjusted earnings climbing 23% to $1.22 per share.

The problem isn't growth, Cisco's AI engine is roaring, with hyperscaler AI infrastructure orders hitting $4 billion in the quarter and $9.3 billion for fiscal 2026. The company turned roughly $4 billion of that demand into revenue and expects AI infrastructure revenue to rocket to $7.5 billion in fiscal 2027.

However, networking product orders surged 40%, but the margin dropped to 64.8% from 67.5% a year earlier as hardware became a bigger piece of the mix. Cisco is selling more AI gear, but the question is how much of that explosive growth will ultimately drop to the bottom line.

The valuation leaves little room for excuses, Cisco traded at $111.205 on Aug. 14 versus a GF Value estimate of just $71.61, putting the stock 55.29% above GF Value.