Why Cisco stock is falling today

What happened?

Shares of networking technology giant Cisco (NASDAQ:CSCO) fell 5.5% in the morning session after the company reported third quarter financial results, which revealed margin pressure amid elevated memory costs. 

According to a company press release, Cisco reported third-quarter revenue of $18.52 billion vs S&P analyst consensus of $18.07 billion (24.4% year-on-year growth, 2.5% beat) and non-GAAP earnings of $1.40 per share vs S&P analyst consensus of $1.33 (5.6% beat). Chief Financial Officer Mark Patterson noted on the earnings call that product gross margin contracted to 63.7% as accelerated hardware deliveries and memory costs outpaced software growth. 

On the other hand, the company raised its full-year revenue guidance to between $74.8 billion and $75.8 billion and lifted its full-year non-GAAP earnings per share projection to between $5.47 and $5.53, the release revealed. 

Chief Executive Chuck Robbins credited surging demand for data-center networking, projecting full-year AI infrastructure revenue from hyperscalers to reach $9 billion, more than double the prior year. However, Citi lowered its price target for Cisco shares from $139 down to $120 while maintaining a Buy rating, citing market multiple compression and indicating quarterly growth may have peaked, TipRanks reported.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Cisco? Access our full analysis report here, it’s free.

What is the market telling us

Cisco’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Cisco is up 27.1% since the beginning of the year, but at $96.65 per share, it is still trading 25.7% below its 52-week high of $130 from June 2026. Investors who bought $1,000 worth of Cisco’s shares 5 years ago would now be looking at an investment worth $1,688.

ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.

Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.