CSCO Should I Buy
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Cisco Systems Inc (CSCO) is not a strong buy at the moment for a beginner investor with a long-term focus. Despite solid financial performance and positive analyst ratings, the recent sharp price drop, insider selling, and concerns about future profitability due to rising memory costs suggest caution. The investor should wait for stabilization in price and sentiment before considering an entry.
The stock shows mixed technical signals. While the MACD is positive and contracting, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200), the RSI is at 27.157, indicating oversold conditions. Key support levels are at $76.171 and $72.844, with resistance at $81.557 and $86.944. The sharp recent price drop (-12.32% regular market change) suggests a bearish short-term trend.
Strong financial performance in Q2 2026, with revenue up 9.71% YoY and net income up 30.77% YoY.
Positive analyst sentiment, with multiple price target increases and upgrades citing AI momentum and networking growth.
AI-related partnerships, such as with Nvidia, positioning Cisco well for enterprise AI adoption.
Significant insider selling, with a 5452.57% increase in the last month.
Concerns about future profitability due to rising memory costs and declining gross margins.
Negative market sentiment following a 12% price drop after earnings, despite beating revenue and EPS expectations.
Cisco's Q2 2026 financials show strong growth: Revenue increased to $15.35 billion (+9.71% YoY), net income rose to $3.175 billion (+30.77% YoY), and EPS grew to $0.8 (+31.15% YoY). Gross margin slightly improved to 63.46% (+0.36% YoY).
Analysts are optimistic about Cisco's long-term prospects. Citi raised its price target to $90, JPMorgan to $95, Evercore ISI to $100, and Morgan Stanley to $91, citing AI momentum, networking growth, and margin expansion. However, some analysts note near-term valuation concerns.
