New York, February 13, 2026, 12:26 (ET) — Regular session
- Cisco clawed back around 2.6% by midday, following a sharp 12.3% drop in the previous session.
- Margin pressure from higher memory component costs is still top of mind for investors.
- Cisco bumped up its full-year revenue forecast but warned investors to expect a slimmer gross margin this quarter.
Cisco Systems, Inc. (CSCO) bounced 2.6% to $76.92 by midday Friday, clawing back some ground after plunging over 12% just a day before. (Reuters)
Cisco shares sank Thursday, marking their sharpest one-day fall since May 2022. The selloff didn’t stop there—tech stocks broadly slumped, as doubts grew over just how fast AI investments will pay off. “’Prove it’ year for AI,” said Jack Herr, primary investment analyst at GuideStone Funds. (Reuters)
No demand stumble for Cisco this quarter, but margin slipped. Adjusted gross margin landed at 67.5%, missing the 68.14% analysts were looking for, squeezed by pricier memory chips flowing into its hardware costs. “Compressed margins definitely took some shine off the report,” noted Jake Behan, head of capital markets over at Direxion. On the call, CEO Chuck Robbins pointed to price hikes and new contract tweaks in response. He also flagged expectations for “AI orders in excess of $5 billion” and more than $3 billion in AI infrastructure revenue from major cloud players in fiscal 2026. (Reuters)
Cisco turned in $15.3 billion in revenue for the quarter, with non-GAAP earnings landing at $1.04 a share. For the third quarter, the company sees revenue coming in between $15.4 billion and $15.6 billion, and it’s projecting non-GAAP EPS in the $1.02 to $1.04 range. Gross margin, on a non-GAAP basis, is expected between 65.5% and 66.5%. Cisco bumped up its fiscal 2026 revenue target to a range of $61.2 billion to $61.7 billion, and the quarterly dividend will edge up by a cent to $0.42. That margin and EPS outlook factors in expected tariff costs under the current trade environment. “Puts us on track to deliver our strongest revenue year yet,” CFO Mark Patterson said. (Cisco Investor Relations)
Stocks snapped higher Friday, tracking a dip in rate pressure as U.S. inflation numbers landed just below forecasts. That gave Treasury yields some room to fall and helped lift the mood for equities. (Reuters)
Cisco bulls point to one thing: AI data center demand isn’t letting up, and management says hyperscaler orders for AI infrastructure picked up steam this quarter. Bears, on the other hand, are focused on memory prices—if they stay elevated—and whether Cisco can keep hiking prices without seeing a dip in new orders.
The pressure from rivals isn’t easing off. Cisco finds itself up against a dense field in data-center networking and security—everyone from niche network firms to chip designers and big system suppliers locked in on AI expansion. And that’s a problem for margins more than top-line sales; missteps show up there before you see them in revenue.
But there’s a flip side. Should memory prices stay elevated, gross margin might slip further than investors will accept—especially since the company is already forecasting a dip this quarter. A slowdown in hyperscaler capex would sap orders just as Cisco pushes to hold the line on profits.
That next checkpoint is on the books. On the earnings call, Robbins confirmed Cisco plans to hold its third-quarter fiscal 2026 results call on Wednesday, May 13, with a 1:30 p.m. Pacific (4:30 p.m. Eastern) start. (Investing.com transcript)
