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CSCO −6.24% today · Analysis updated Nov 13, 2026, 4:50 PM ET
Why is Cisco Systems (CSCO) stock down today?
Cisco's fiscal Q1 2027 was strong. Revenue rose 24% to a record $18.5B, adjusted EPS rose 40% to $1.40 against about $1.33 expected, and FY27 guidance went up to $74.8B-$75.8B revenue and $5.47-$5.53 EPS. The market sold the news anyway. The stock closed at $95.64 on Nov 13, down about 6.2% from $102.01, on volume of about 28.4M shares. That is the second-heaviest volume day in the past two weeks, so the selling was real, not thin. Adjusted gross margin fell 250bp to 65.6% on AI hardware mix and memory costs. Management expects full-year gross margin just below 65%. Several brokers cut targets after the print: Barclays to $109, Piper to $112, Citi to $120, Wells Fargo to $130 and Rosenblatt to $140. Targets still sit well above the price. A record 37.8% operating margin and 2% opex growth show earnings power is intact. Valuation screens as stretched on some measures, and insider selling is noted. The price is now close to the Nov 5-6 lows (low $93.35, close $93.85), so that area is the next test. The pattern of falling after beats has now repeated three times this year.
News behind the analysis
- Cisco Stocks Fall 5.29% as AI Networking Mix Squeezes Gross MarginsShares fell 5.29% to $96.62 on Nov 13 after the Q1 report. Revenue hit a record $18.5B and the AI outlook doubled, but non-GAAP gross margin dropped 2.5 points.
- Cisco shares down as focus turns to marginsNon-GAAP gross margin fell 250bp to 65.6%. Adjusted EPS of $1.40 beat estimates by 7 cents, and the Q2 and FY EPS guides are above consensus.
- Why is Cisco stock sliding today?A 'sell the news' reaction after a record quarter. The stock had gained about 35% year to date before the report, so expectations were high.
- What Cisco Systems (CSCO) Said on Its Q1 Earnings CallRevenue rose 24% to $18.5B and adjusted EPS rose 40%. Management expects full-year adjusted gross margin just below 65%, and Q1 shareholder returns were $3.7B.
- Cisco Systems (CSCO) Reports Strong Earnings but Faces Margin PressuresOperating margin reached a record 37.8% on only 2% adjusted opex growth. RPO rose 8% to $46.2B.
- Cisco earnings were strong: why is the stock sliding then?The selloff is mainly about mix, margins and the durability of growth rather than a demand collapse. Several analysts cut price targets.
- CSCO Maintains Rating by Barclays -- Price Target Lowered to $109Barclays kept Equal-Weight and cut its target to $109 from $123 on Nov 13.
- CSCO Maintained by Rosenblatt -- Price Target Lowered to $140Rosenblatt kept Buy and cut its target to $140 from $165. Morgan Stanley and HSBC have also cut targets.
- Cisco latest news: price target cuts at Piper Sandler, Wells Fargo, Barclays, CitiPiper cut to $112 from $125, Wells Fargo to $130 from $150, Barclays to $109 from $123, and Citi to $120 from $139.
- Cisco has beaten twice this year and fallen twiceCisco beat estimates in February and August, and the shares fell 12.1% and 8.4%. The author says gross margin now drives the stock more than headline numbers.
About Cisco Systems, Inc. Common Stock (DE)
Cisco Systems is the world's largest maker of enterprise networking gear (switches, routers, wireless) and also sells security, collaboration (Webex) and observability software, including Splunk, which it acquired in 2024. What sets it apart is its huge installed base of corporate and telecom customers and a growing business supplying AI data-center networking to hyperscale cloud companies, which made up roughly 6% of revenue in fiscal 2026.
How it makes money
Cisco makes most of its money selling networking hardware, which is its largest product category. The rest comes from security, collaboration and observability software and subscriptions, plus technical support and services. Fiscal 2026 (ended July 2026) revenue was about $63 billion, up roughly 12%. Product sales grew about 16%, while services revenue was flat. Software across all areas brought in about $23 billion, roughly a third of the total. Cisco returns most of its free cash flow to shareholders through dividends and share buybacks. For fiscal 2027, the company expects revenue of about $72 to $73 billion.
What usually moves CSCO
- AI data-center networking orders from hyperscalers
- Corporate IT and campus network upgrade cycles
- Growth in software and subscription revenue (Splunk, security)
- Memory and component costs, plus tariffs, affecting margins
- Quarterly guidance compared with analyst expectations