New York, Feb 14, 2026, 10:31 EST — Market closed.
- Cisco’s stock found its footing heading into the weekend, recovering from a steep drop earlier tied to margin pressures.
- Memory component costs have investors on edge, with profit implications in sharp focus.
- Peers in networking are making margin comments that are beginning to shift the group.
Cisco Systems Inc (CSCO) climbed 2.5% to close at $76.85 on Friday. The stock recovered some ground after a rocky week that had seen it take significant hits.
The rebound leaves questions unanswered. With U.S. stock markets shut for Presidents Day on Monday, traders face an extended wait before seeing how shares really react. 1
Cisco tumbled roughly 12% Thursday, marking its sharpest single-day decline since May 2022. The selloff took a bite out of tech hardware peers—Dell slid 9%, Hewlett Packard Enterprise dropped 7%, and Arista Networks shed just over 4%. The S&P 500’s information technology sector ended down 2.7%. 2
Cisco blamed higher memory component prices for the dip. Adjusted gross margin fell to 67.5%, down from 68.7% a year ago. Looking at the current quarter, Cisco’s forecast puts that number between 65.5% and 66.5%. CEO Chuck Robbins said Cisco is hiking prices and “renegotiating contracts,” claiming the company is positioned to “manage this industry-wide dynamic better than our peers.” 3
Cisco’s adjusted gross margin missed what analysts were looking for, sending the stock down 7% in after-hours trading, according to Reuters. The company flagged a crunch in memory supply, blaming the accelerated rush to build AI infrastructure for driving costs higher. Direxion’s Jake Behan weighed in, saying “compressed margins definitely took some shine off the report.” Still, Cisco CEO Chuck Robbins pointed to “AI orders in excess of $5 billion” from hyperscalers expected in fiscal 2026, and raised the company’s full-year revenue outlook. 4
Cisco bumped up its quarterly dividend by 2%, setting it at $0.42 a share for those holding stock as of April 2, with payment due April 22. The company is projecting revenue between $15.4 billion and $15.6 billion this quarter, and sees non-GAAP EPS landing in the $1.02 to $1.04 range. That outlook, Cisco noted, factors in the expected effect of tariffs under today’s trade rules. “We’ll keep pushing for profitability through financial discipline,” CFO Mark Patterson said. 5
Margin pressure is showing up across the group. Arista kept its gross-margin forecast steady at 62% to 64%, even as higher memory costs kicked in. That was enough for investors—shares surged after hours on its results, while Cisco slipped, according to MarketWatch. Evercore ISI’s Amit Daryanani bumped his Arista target to $200 from $175, naming the stock his top pick. 6
Some on Wall Street think Cisco could recover margin if higher prices hold up and supply constraints loosen. Ben Reitzes at Melius Research has stuck with his Buy call and $100 target, betting on better margins in Q4 as Cisco pushes pricing and works its supply chain levers. 7
Some see the squeeze persisting. Barclays analysts admitted, “did not think memory would have had this level of weakness,” and flagged a shift in optics and AI switches as a likely factor. 8
The setup isn’t one-sided. Should memory inflation drag on beyond Cisco’s expectations—or if clients resist the price increases and contract changes—the margin pressure may stick around, leaving the stock on edge.
The immediate driver? The reopening after the holiday. The NYSE takes a pause Monday, Feb. 16, leaving Cisco on the sidelines until Tuesday, Feb. 17, when U.S. markets come back online. That’s when traders zero in on memory prices and what’s being said about margins across the sector. 9
