New York, June 5, 2026, 13:03 (EDT)
Cisco Systems, Inc. shares dropped roughly 5% early Friday afternoon, snapping back after a run-up on AI hopes. A solid U.S. jobs report sent investors selling higher-priced tech stocks.
Cisco slipped to $123.25, off $6.75 from the $130.00 close Thursday. The stock opened at $128.65 and fell to $123.21 at its lowest so far. Latest volume came in at roughly 10.8 million shares.
Cisco has been getting lumped in with AI infrastructure plays, rather than as an old-school networking company with slow growth. That’s made its stock a target as the market cooled on AI beneficiaries, since it makes routers, switches, and equipment for big data centers supporting AI workloads.
Stocks dropped after Labor Department numbers showed U.S. nonfarm payrolls climbed by 172,000 in May. That beat the 85,000 jobs forecast from a Reuters poll. Treasury yields moved up with traders seeing a higher chance of a Fed rate hike. Charlie Ripley, senior investment strategist at Allianz Investment Management, told Reuters the market was now betting on a “100% probability” of a Fed hike later this year after what he called a “tremendous run in equities.” Reuters
Cisco was another negative for the Dow Jones Industrial Average, which counts it as one of its 30 members. According to MarketWatch data, Cisco and IBM helped pull down the price-weighted index. In this setup, stocks with bigger price changes carry more sway than just their market value.
The day before the fall, Cisco jumped 2.77% to $130.00 as the Dow climbed 1.73% and the S&P 500 picked up 0.41%. Cisco touched a new 52-week high, shrugging off pressure in chip and AI names after Broadcom’s weak quarterly revenue report.
Cisco’s run started after its May 13 earnings. The company turned in record third-quarter revenue of $15.8 billion, a 12% jump from a year ago, and raised its forecast for fiscal 2026 AI infrastructure orders from hyperscalers to $9 billion, up from $5 billion.
Cisco CEO Chuck Robbins said back then the company was “well-positioned” as “critical infrastructure for the AI era.” Cisco said total product orders jumped 35%, with networking product orders up more than 50%. Investors saw this as proof AI spending was moving past chips and into data-center networking. Cisco Investor Relations
Bulls are latching on to that story. Ryan Lee, SVP of product and strategy at Direxion, told Reuters after Cisco’s results that hyperscaler capital spending went beyond “just chips.” Cisco said it would cut close to 4,000 jobs as it moves spending into AI, silicon, optics and security. Reuters
It wasn’t just Cisco feeling the hit. Broadcom slid 6.3% Friday, taking a knock as traders stepped away from AI hardware names. IBM, also part of the Dow’s tech group, dropped 6.5%. The Invesco QQQ Trust, tied to the Nasdaq 100, lost 3.5%.
Cisco hasn’t moved far from its recent top. The stock’s 52-week high is $130.37 and the low is $63.86, according to Google Finance. Out of 17 analysts tracked over the last three months, 11 have buy ratings, six have holds.
The trade looks tougher now. Higher rates could keep investors questioning valuations for AI-related stocks. A slowdown in hyperscaler demand or Cisco’s AI order book turning into sales with slimmer margins might erase Cisco’s post-earnings premium. Cisco’s fiscal 2026 outlook factors in expected tariff costs under current policy, so cost worries remain.
