Piper Sandler cut its price target on Cisco to $125 from $132, and the stock dropped about 5% on Tuesday. Analysts cited a lower price-to-earnings multiple as growth appears to be peaking across the networking industry.
Piper Sandler trims its target
Cisco stock dropped about 5% on Tuesday after Piper Sandler cut its price target on the networking equipment vendor to $125 from a prior $132. Piper analysts pointed to lower price-to-earnings multiple expectations, driven by concerns that growth is peaking in the industry.
The stock had hit a record high in June, and shares are still up about 56% over the past 12 months as revenue surged alongside the artificial intelligence boom.
Strong earnings, cautious guidance
Last month, Cisco posted fourth-quarter revenue of $17.25 billion, beating an LSEG estimate of $16.8 billion. Shares sank after the company issued its FY2027 guidance during that same earnings call, met with a lackluster reception from analysts.
Cisco projected nearly 15% revenue growth for the year, yet analysts argued sales growth would dip back into single digits. Piper analysts called the projection "conservative" given greater market demand.
CEO Chuck Robbins struck a measured tone on the outlook. According to CNBC: "we're going to start the year being a little bit prudent"
Hyperscaler demand still climbing
Hyperscalers made up about $4 billion in Cisco's revenue in fiscal year 2026, and the company expects that figure to almost double to $7.5 billion in fiscal 2027.
Source: CNBC
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