Choppy Markets as AI Disruption Looms Large
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 11 2026
0mins
Should l Buy CSCO?
Source: CNBC
- Job Data Impact: U.S. stocks experienced volatility on Wednesday as stronger-than-expected January job growth data diminished the likelihood of Federal Reserve interest rate cuts, leaving investors uneasy and preventing the market from maintaining its initial gains.
- AI Sector Fluctuations: AI infrastructure stocks gained renewed attention, with Vertiv reporting a 252% year-over-year growth in orders, driving related stocks like Eaton and GE Vernova up 3% to 4% and reaching new highs, indicating strong market demand for AI-related businesses.
- Price Target Adjustments: In light of positive revisions to global hyperscale data center expectations, price targets for Eaton and GE Vernova have been raised to $425 and $875 respectively, reflecting confidence in their growth potential within the data center market.
- Semiconductor Supplier Performance: Qnity Electronics surged 15% this week, surpassing the $110 price target; while no target price adjustment has been made yet, strong results from its peer Entegris suggest a positive outlook for the industry, leading to investor optimism.
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Analyst Views on CSCO
Wall Street analysts forecast CSCO stock price to rise
13 Analyst Rating
10 Buy
3 Hold
0 Sell
Strong Buy
Current: 76.850
Low
76.00
Averages
91.30
High
100.00
Current: 76.850
Low
76.00
Averages
91.30
High
100.00
About CSCO
Cisco Systems, Inc. designs and sells a range of technologies that power the Internet. The Company is integrating its product portfolios across networking, security, collaboration, applications and cloud. The Company's segments include the Americas; Europe, Middle East, and Africa (EMEA), and Asia Pacific, Japan, and China (APJC). Its Networking product category represents its core networking technologies of switching, routing, wireless, fifth generation (5G), silicon, optics solutions and compute products. Its Security product category consists of its cloud and application security, industrial security, network security, and user and device security offerings. Its Collaboration product category consists of its meetings, collaboration devices, calling, contact center and platform as a service (CPaaS) offering. Its Observability product category consists of its full stack observability offerings.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Margin Pressure: Non-GAAP gross margins fell by 120 basis points to 67.5%, primarily due to soaring memory costs and a shifting product mix, with expectations for further declines to 65.5%-66.5% in Q3, which will continue to pressure the company's short-term profitability.
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- Revenue Growth vs Market Reaction: Cisco achieved a record $15.35 billion in revenue for Q2, marking a 10% year-over-year increase; however, the stock tumbled over 12%, indicating investor concerns over narrowing profit margins despite beating Wall Street expectations.
- Margin Pressure: Non-GAAP gross margins fell by 120 basis points to 67.5%, primarily due to soaring memory costs and a shifting product mix, with expectations for further declines to 65.5%-66.5% in Q3, which will continue to pressure the company's short-term profitability.
- AI Infrastructure Orders: Cisco's hyperscaler orders reached $2.1 billion in Q2, matching the total AI orders for fiscal year 2025, highlighting the company's significant role in the AI infrastructure transition, although concerns about high valuation multiples persist.
- Divergent Analyst Views: Analysts are divided on Cisco's future, with optimists noting the company's quiet success in AI buildout, while pessimists point to margin pressures and the revenue drag from Splunk's transition, reflecting varying market expectations for Cisco.
See More
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- Significant Order Growth: Cisco secured $2.1 billion in AI infrastructure orders from hyperscale customers in Q2 of fiscal 2026, marking a 62% increase from $1.3 billion in Q1, indicating strong demand and growth potential in the AI infrastructure market.
- Optimistic Future Outlook: The company anticipates over $5 billion in AI orders for fiscal 2026, although this forecast excludes its newest products, reflecting ongoing expansion and market confidence in Cisco's AI capabilities.
- Innovation Driving Demand: Cisco shipped its one millionth Silicon One chip in Q2 and introduced the G300 chip, which delivers 102.4 Tbps of bandwidth, further driving demand from hyperscale customers and enhancing the company's competitive edge.
- Market Challenges and Opportunities: Despite rising memory chip costs, Cisco's AI infrastructure business is thriving, with expected revenues of around $3 billion from hyperscale and enterprise customers, underscoring the company's critical role in the AI data center buildout.
See More
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- Australian Market Recovery: Following the Lunar New Year holiday, Australia's S&P/ASX 200 index opened 0.81% higher, indicating a rebound in investor confidence that could drive economic recovery.
- Strong Opening for Japan: Japan's Nikkei 225 futures pointed to a strong opening post-holiday, with Chicago futures at 57,645, up from the last close of 57,143.84, reflecting optimism in the tech sector.
- U.S. Market Influence: The U.S. S&P 500 rose 0.56% to close at 6,881.31, primarily driven by gains in technology stocks, as investors focused on the Federal Reserve's policy meeting minutes, which may spill over to the Asia-Pacific markets.
- Taiwan Market Closed: While the overall sentiment in the Asia-Pacific region is positive, the Taiwan market remains closed for the Lunar New Year holiday, prompting investors to watch for reactions once trading resumes.
See More
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- Strong Earnings Report: Palo Alto Networks reported a revenue of $2.59 billion for Q2 FY2026, reflecting a 15% year-over-year increase, surpassing the $2.58 billion consensus estimate, indicating robust performance in the cybersecurity sector.
- Earnings Per Share Growth: The company achieved a 27% year-over-year increase in earnings per share (EPS) to $1.03, exceeding analyst expectations of 94 cents, showcasing improved profitability, yet the market reacted negatively to future guidance.
- Guidance Downgrade Impact: Despite management raising current quarter and full-year revenue forecasts, the stock fell over 8% in after-hours trading due to a lowered outlook on future earnings, highlighting market concerns about profitability.
- AI-Driven Growth Potential: CEO Nikesh Arora emphasized that AI adoption is expanding the attack surface, increasing demand for comprehensive platform security solutions, which is expected to drive higher customer demand and revenue growth in the future.
See More
Apple Stock Emerges as a 'Safe Haven' for Big Tech
- Apple's Stock Performance: Apple shares experienced the largest increase among the Magnificent Seven stocks on Tuesday.
- Investor Sentiment: Investors are favoring Apple over other tech companies that are heavily investing in artificial intelligence.
See More
MUBADALA INVESTMENT CO PJSC - HOLDINGS UPDATE AS OF DECEMBER 31, 2025, COMPARED TO THE PREVIOUS QUARTER ENDING SEPTEMBER 30, 2025
Investment Overview: The article discusses changes in holdings as of December 31, 2025, compared to the previous quarter ending September 30, 2025.
Comparison of Holdings: It highlights the differences in investment positions and strategies between the two reporting periods.
See More
