Cisco (CSCO) Earnings Could Offer Look at AI Infrastructure Strength

As a foundational player in the AI industry, Cisco (CSCO) shares are up more than 70% in the past year and its earnings after tomorrow’s closing bell will shed light on its trajectory as it reinvents itself.

Cisco stock has moved roughly sideways since a +13.4% one-day earnings jump May 14. Shares have underperformed peers that have transformed their AI revenue profiles including Dell Technologies (DELL), which is up 233% over the past year, and Hewlett Packard Enterprises (HPE), up 163%. For converse perspective, IBM (IBM) is down over 2%, and Super Micro Computer (SMCI) is down nearly 30%.

Cisco is a name that is ubiquitous in office environments, as they make a wide variety of products including physical networking products such as routers and switches, cybersecurity applications, online collaboration tools such as the video meeting software Webex, and cloud data management applications. However, Cisco also has become a key player in the AI boom, as the burgeoning industry requires the high-performance networking infrastructure and enterprise security that CSCO provides.

Here are three things to know about Cisco’s earnings:

Outlook: The Street is looking for earnings per share of $1.17 against last year’s figure of $0.99 (+18.2%) and for revenue of $16.85B vs. $14.67B (+14.9%) year-over-year, according to Zacks. Cisco reported a 1.92% earnings surprise last quarter compared to its average surprise of 2.0%.

Analysts: Cisco’s most recent analyst activity came from a Citi price target hike on Aug. 6 to $139 from $112. Citi analysts, who maintained its Buy rating in their earnings preview, said they believe Cisco will benefit from the growing AI networking market and that investors will be looking toward the company’s fiscal 2027 projections. On Aug. 4, UBS maintained its buy rating and $132 price target, commenting: "While the revenue bias is to the upside, persistently high component costs will likely cap Cisco's gross margin around 66% resulting in potential EPS upside.”

Technicals: Cisco has seen some notable swings after its last earnings event in May, jumping up to its all-time highs of $130.37 on Jun. 4 but retreating to $107.53 only 42 days later on Jul. 16. Price now sits near a set of old highs from mid- and late-June near $123 after a failed upside breakout on Aug. 5. In terms of horizontal resistance, there is not much that sticks out as potential hurdles between here and the Jun. 4 highs. To the downside, relative lows near $115 on Aug. 5, $112 on Jul. 28, and $108 on Jul. 16 stand out as potential support. The options market shows a potential expected move of about +/-10 (8.1%) for the weekly expiration on Aug. 14, which suggests the possibility of new all-time highs with an upper boundary of $133. Meanwhile, the Sept. 18 monthly expiration is also noteworthy as it presents a range of about +/-15.2 (12.4%), the lower level of which aligns with the Jul. 16 lows near $108.

ECONOMIC DATA (ET), Tuesday, Aug. 11

• 06:00 AM: NFIB Business Optimism Index
• 10:00 AM: Existing Home Sales
• 1:00 pm: 3-Year Note Auction

EARNINGS SNAPSHOT

Tuesday, Aug. 11:

• Premarket: Sea Limited (SE), Cardinal Health (CAH), On Holding (ONON), Tencent Music Entertainment Group (TME)
• Postmarket: Lumentum (LITE), CoreWeave (CRWV), Super Micro Computer (SMCI), CAVA Group (CAVA), Firefly Aerospace (FLY)

Wednesday, Aug. 12:

• Premarket: Nebius Group (NBIS), Amcor (AMCR), Brinker International (EAT)
• Postmarket: Cisco Systems (CSCO), Cerebras Systems (CBRS)

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