New York, Feb 14, 2026, 10:31 EST — Market closed.
- Cisco shares steadied into the weekend after a sharp, margin-driven selloff.
- Investors are fixated on memory component costs and what they mean for profit.
- Networking peers’ margin commentary is starting to move the group.
Cisco Systems Inc (CSCO) shares ended Friday up 2.5% at $76.85, after a volatile stretch that left the stock nursing heavy losses earlier in the week.
The bounce does not settle the debate. U.S. stock markets are closed on Monday for Presidents Day, stretching the pause before traders get another clean read on the shares. (Nasdaq)
On Thursday, Cisco slid about 12% in its steepest one-day drop since May 2022, and the move spilled into tech hardware. Dell and Hewlett Packard Enterprise fell 9% and 7%, Arista Networks dropped more than 4%, and the S&P 500’s information technology sector lost 2.7%. (MarketWatch)
Cisco pointed to rising memory component costs as the culprit. Its adjusted gross margin — what remains of revenue after production costs — slipped to 67.5% from 68.7% a year earlier and the company projected 65.5% to 66.5% for the current quarter; CEO Chuck Robbins said Cisco is raising prices and “renegotiating contracts” and expects it can “manage this industry-wide dynamic better than our peers.” (Investopedia)
Cisco’s adjusted gross margin also came in below analyst estimates, and the shares fell 7% in extended trading after the report, Reuters reported. It said the rapid build-out of AI infrastructure has tightened memory supply and pushed up prices, and Direxion’s Jake Behan said “compressed margins definitely took some shine off the report.” Robbins said Cisco expects “AI orders in excess of $5 billion” from hyperscalers in fiscal 2026, as it lifted its full-year revenue forecast. (Reuters)
In its earnings statement, Cisco said it raised its quarterly dividend 2% to $0.42 per share, payable April 22 to shareholders of record April 2. It forecast current-quarter revenue of $15.4 billion to $15.6 billion and non-GAAP EPS of $1.02 to $1.04, and said guidance includes the estimated impact of tariffs under current trade policy. CFO Mark Patterson said Cisco would “continue to drive profitability by exercising financial discipline.” (Cisco Newsroom)
The margin fight is also showing up in the peer tape. Arista kept its gross-margin outlook at 62% to 64% even after factoring in higher memory costs, and its shares jumped after hours after its results while Cisco fell, MarketWatch reported. Evercore ISI analyst Amit Daryanani raised his Arista price target to $200 from $175 and called it his top pick. (MarketWatch)
Some analysts argue Cisco can claw back margin if pricing sticks and supply tightness eases. Melius Research’s Ben Reitzes kept a Buy rating and a $100 price target, saying he expects margins to improve in the fourth quarter as Cisco leans on pricing and supply-chain steps. (Barron’s)
Others think the pressure may have more run. Barclays analysts wrote they “did not think memory would have had this level of weakness,” pointing to the mix of optics and AI switches as a possible driver. (Investing)
But the setup cuts both ways. If memory inflation lasts longer than Cisco expects, or customers push back on price hikes and contract resets, the margin squeeze could linger and keep the stock jumpy.
The next catalyst is simple: the market’s first chance to trade it again after the holiday break. The NYSE is closed Monday, Feb. 16, and Cisco shares will be back in play when U.S. markets reopen on Tuesday, Feb. 17, with memory pricing and peer margin talk squarely in focus. (New York Stock Exchange)
