● Covered by 1 source · 1 reportLow impact1 negative
Cisco stock drops 5% after Piper Sandler lowers price target due to growth concerns
Key points
- Cisco stock fell almost 5% on Tuesday.
- Piper Sandler cut Cisco's price target to $125 from $132.
- Analysts cited concerns about peaking industry growth.
- Cisco's revenue increased due to the AI boom.
Stock Decline and Price Target Cut
Cisco's stock experienced a nearly 5% decline on Tuesday. This drop followed Piper Sandler's decision to lower its price target for the company's shares from $132 to $125. The stock closed at $106.44 on Tuesday.
Analyst Concerns Over Growth
Piper Sandler analysts attributed the revised price target to lower price-to-earnings multiple expectations. These expectations stem from concerns that growth within the networking equipment industry is reaching its peak. This assessment comes despite Cisco's stock having risen 57% over the past 12 months, reaching a record high in June, largely due to increased revenue from the artificial intelligence boom.
Recent Financial Performance and Guidance
Last month, Cisco reported strong fourth-quarter earnings, with $17.25 billion in revenue, surpassing the $16.8 billion estimate. During its August earnings call, Cisco provided guidance for FY2027, projecting nearly 15% revenue growth. However, this guidance received a lukewarm reception from analysts, who argued that sales growth would likely return to single digits. Piper analysts described Cisco's projection as "conservative" given broader market demand.
Hyperscaler Revenue Projections
Cisco reported approximately $4 billion in revenue from hyperscalers in fiscal year 2026. The company anticipates this figure will almost double to $7.5 billion in fiscal year 2027, indicating continued growth in this segment despite overall industry growth concerns.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
The daily brief
One email each morning: the day's tech stories, clustered across outlets and summarized. No account needed.
One email a day. Unsubscribe in one click, any time.
Today's brief
Spend a few minutes, get the whole day. Every topic's top stories in one hands-free rundown — listen, watch, or read the transcript.
▶ Play today's brief
New every morning, and the back catalogue is archived by date.
Reporting from
Cisco's stock fell by nearly 5% after Piper Sandler reduced its price target from $132 to $125. This adjustment reflects analyst concerns that growth in the networking equipment industry may be peaking, despite Cisco's recent strong revenue performance driven by AI demand.