New York, February 12, 2026, 05:11 EST — Premarket
- Cisco shares slid in premarket trade after quarterly results put margins back in the spotlight.
- The company raised its full-year revenue forecast and pointed to growing AI-related orders.
- Traders are watching memory-cost pressure, pricing moves and the open for signs of follow-through.
Cisco Systems shares fell sharply ahead of the U.S. open on Thursday. By 5:00 a.m. EST, the stock was down 7.9% at $78.74, from a prior close of $85.54. (Public)
The drop lands at a touchy moment for hardware names tied to the AI data-center build-out. Investors have rewarded companies with clear exposure to that spending, but they turn fast when costs start eating into profits.
Cisco said adjusted gross margin — the slice of sales left after the cost of building and shipping gear — slipped to 67.5% in its latest quarter, missing estimates, as higher memory prices rippled through the supply chain. CEO Chuck Robbins told investors Cisco has raised prices and is rewriting contract terms, while lifting its fiscal 2026 revenue outlook and projecting AI orders above $5 billion; “compressed margins definitely took some shine off the report,” said Jake Behan, head of capital markets at Direxion. (Reuters)
In its earnings release, Cisco reported revenue of $15.3 billion for the quarter ended Jan. 24, up 10%, and non-GAAP earnings — the company’s adjusted measure that strips out some items such as acquisition-related costs — of $1.04 per share. It forecast third-quarter revenue of $15.4 billion to $15.6 billion and non-GAAP gross margin of 65.5% to 66.5%, while reporting AI infrastructure orders from hyperscalers — big cloud operators — of $2.1 billion for the quarter. Cisco also raised its quarterly dividend 2% to $0.42 a share, and Robbins said the company is “uniquely positioned” to help customers “power the AI-era.” (Cisco Investor Relations)
Analysts at Barclays pointed to an ugly mix problem in the margin line. “We did not think memory would have had this level of weakness,” they wrote, adding that optics and AI switch demand could be part of the drag. (Investing.com UK)
The earnings print follows Cisco’s push into data-center networking products built for AI workloads. This week it rolled out its Silicon One G300 networking chip and a router aimed at huge data centers, taking aim at Broadcom and Nvidia; Cisco executive Martin Lund said the design can reroute data around network bottlenecks “within microseconds” and speed some AI jobs. (Reuters)
For traders, the question is whether the margin hit looks like a one-quarter bump or something that sticks. Cisco can push price, but it still has to get customers to accept it — and keep product mix from turning against it as demand shifts toward newer AI gear.
The downside case is simple: memory costs stay hot, customers push back on repricing, and gross margins slide more than expected even as revenue grows. That would leave the stock leaning harder on AI optimism at a time when markets punish anything that looks like a cost squeeze.
