New York, Feb 16, 2026, 16:34 (ET) — The market’s final bell has rung.
- Cisco ended Friday up, capping a choppy week driven by its quarterly outlook.
- AI-fueled demand is pulling one way, but hardware margins remain squeezed—investors are trying to balance the two.
- Tuesday brings the next U.S. session, where investors will be sorting through both macro indicators and key big-tech moves.
Cisco Systems Inc stock comes back online for U.S. trading Tuesday after the Presidents Day break, last seen up 2.47% at $76.85 when markets closed Friday. 1
The pause is key. Cisco stands at the intersection of two colliding trades—AI infrastructure demand driving orders up, but component costs climbing, putting the squeeze on profits even as sales rise. When liquidity comes back, traders are left to figure out which force wins out.
The margin story took the spotlight in Cisco’s latest quarterly results. Adjusted gross margin landed at 67.5%—a miss versus forecasts—after memory prices surged, according to Reuters. “Compressed margins definitely took some shine off the report,” said Jake Behan, head of capital markets at Direxion. 2
Cisco stuck with its message of steady demand, projecting fiscal 2026 revenue between $61.2 billion and $61.7 billion. The board bumped the quarterly dividend by 2%, now $0.42 per share. AI infrastructure sales to hyperscalers? $2.1 billion for the quarter through Jan. 24. CFO Mark Patterson cited “exercising financial discipline” on spending. 3
It’s been a choppy ride for the shares. Cisco dropped roughly 12% in regular hours following its results, while Arista Networks popped higher in after-hours on the back of its own numbers. The market’s focus: margin guidance, which investors quickly linked to hardware pricing muscle. 4
Cisco is pushing to stay relevant in the AI product race—not just in its outlook. Last week, the company rolled out its Silicon One G300 networking chip alongside a new router, both built to accelerate data movement within massive AI data centers. That puts Cisco directly in competition with Broadcom and Nvidia for a slice of what it sees as a $600 billion market. “We focus on the total end-to-end efficiency of the network,” said Martin Lund, the company’s executive vice president. 5
Looking ahead, the key question is whether Cisco can turn those AI-fueled orders into real revenue before costs bite too deep, and whether higher prices will stick without chilling demand. The so-called “hyperscalers”—those huge cloud players buying in bulk—have the clout to swing a quarter or pressure Cisco on pricing.
The risk? Memory prices could remain high for longer than the market is betting, turning a short-term margin squeeze into something more persistent. Should that scenario play out and enterprise spending also lose steam, Cisco’s revenue outlook might stay intact, but profit expectations could keep the stock under pressure.
Feb. 25 is circled on the calendar — that’s when Nvidia drops its latest quarterly numbers. For plenty of investors, it’s the big tell on AI capex and what’s happening with data-center spend, data that tends to ripple across to networking names like Cisco. Cisco, for its part, has a big security marketing rollout set for RSAC in San Francisco from March 23 to 26. 6
