Cisco Stock Slumps on Earnings Beat Amid High Expectations

Cisco Systems' stock took a hit in after-hours trading on its fiscal fourth-quarter 2026 results, which may seem counterintuitive given the strong earnings numbers. The networking giant reported adjusted earnings of $5.05 to $5.11 per share and revenue of $72.2 billion to $73.4 billion for fiscal 2027, far exceeding analyst estimates.

However, the stock's pre-earnings momentum had already been sky-high, with a year-to-date gain of around 60%. The options market had also priced in a volatile reaction, anticipating a move of approximately 8% in either direction. As such, even a strong beat-and-raise cycle was insufficient to drive further upside.

The company's ongoing gross margin pressures from AI hardware mix and higher memory costs may have contributed to the sell-off, with pre-earnings commentary flagging these issues as potential overhangs. The broader market provided no meaningful directional cue on the day, with the S&P 500 essentially flat, the Nasdaq marginally lower, and the Dow Jones barely changed.