Why Cisco Systems Stock Was Falling on Thursday
Cisco Systems (NASDAQ: CSCO) reported earnings results on Wednesday that beat expectations. However, management lowered its outlook for revenue and earnings for the near term, which is why the stock is down 11% as of 10:54 a.m. ET on Thursday.
For the fiscal first quarter, revenue and adjusted earnings were solid, up 8% and 29% year over year, respectively. Cisco has been a beneficiary of the spending surge on artificial intelligence (AI), and this continued in the recent quarter, with enterprise investments in generative AI technology cited as one of the factors driving higher revenue in the quarter.
The problem is that customers are in the process of installing new equipment, which is slowing down new orders. Management noted this was most pronounced with larger service providers and cloud customers, and the declining order trend worsened in October.
Source Fool.com
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