Cisco (NASDAQ:CSCO) Rises 4.1 Points Ahead of Nasdaq; Thin Volume Questions Rally Strength

With markets closed Sunday, Friday’s finish remains the latest verified price. Cisco finished at $114.17, rising 1.25% during Friday’s regular session. The shares gained about 2.0% last week, despite Nasdaq losing 2.1%. They remain 12.4% below the June 4 52-week high of $130.37. Investing.com

Friday’s price equals 26.7 times Cisco’s FY2026 adjusted EPS midpoint. Management expects $4.27 to $4.29, compared with $3.81 last year. That range implies about 12.3% adjusted EPS growth for the year. That multiple could compress after a material miss on orders or margins. This calculation uses company guidance, not an updated analyst-consensus estimate. Cisco Investor Relations

Cisco booked $1.9 billion in Q3 and $5.3 billion through nine months. Its $9 billion target therefore requires another $3.7 billion during Q4 alone. That implied quarter would be roughly 95% larger than Q3. Cisco reported five new design wins and over $1 billion of Acacia orders. However, large hyperscaler orders can shift materially between reporting periods. Cisco Investor Relations

Cisco guides fiscal Q4 revenue between $16.7 billion and $16.9 billion. The midpoint implies about 14.5% growth from the comparable year-earlier quarter. Adjusted EPS guidance is $1.16–$1.18, implying roughly 18.2% year-over-year growth. The adjusted gross-margin range sits between 65.5% and 66.5% for Q4. Cisco’s next quarterly call is scheduled for August 12 at 4:30 Eastern time. The bar is high. Cisco Investor Relations

Q3 adjusted gross margin fell 260 basis points to 66.0%. Product margin dropped 330 basis points from last year, reaching 64.3%. Cisco cited product mix and higher memory costs as the main pressures. Q4 guidance permits little immediate recovery from Q3’s reported level. Inventory reached $4.7 billion, while inventory purchase commitments reached $16.0 billion. Those commitments support expected demand but raise risk if demand shifts. Cisco Investor Relations

Product orders rose 35%, or 19% after excluding hyperscaler customers. Enterprise orders increased 18%, while public-sector orders climbed 27%. Campus networking orders rose more than 25% from last year. Data-center switching orders increased by more than 40%. Neocloud, sovereign and enterprise AI customers generated about $900 million year to date. Cisco cited a roughly $3 billion pipeline across those customer groups. The breadth is real, though hyperscalers still drive the headline order target. Cisco Investor Relations

Annual recurring revenue rose 2% to $31.2 billion in Q3. Software revenue increased only about 1% to roughly $5.7 billion. Security revenue was flat, while Observability revenue increased by 3%. Cisco said Splunk’s cloud shift is reducing near-term recognized revenue. The company expects more than 1,000 new Splunk customer logos during FY2026. Standalone Splunk revenue was not disclosed, preventing a clean assessment.

Cisco returned $2.9 billion to shareholders during the third quarter. That included $1.7 billion of dividends and $1.3 billion of buybacks. The $0.42 quarterly dividend produces a 1.47% annualized yield at Friday’s close. Cisco still has $9.6 billion available under its repurchase authorization. Q3 repurchases averaged $80.28 per share, well below Friday’s price. Buybacks now retire fewer shares for each dollar spent. Cisco Investor Relations

Cisco’s next quarterly call is scheduled for August 12. Microsoft, Meta, Amazon and Apple report results during the coming week. Microsoft, Meta and Amazon may shape expectations for hyperscaler networking demand. The Federal Reserve decides policy Wednesday and is expected to hold rates. Late Friday, futures priced a 38% chance of a quarter-point increase. GDP, inflation and consumer-sentiment reports could also move Treasury yields. That probability can change quickly.