Cisco Systems shares slipped in after-hours trading despite a sharp profit and revenue jump fueled by AI infrastructure demand, as expectations for the networking equipment provider had already run high. U.S. stock futures ticked higher on Thursday as investors weighed cooling inflation data and looked ahead to Applied Materials' earnings and the July producer price index.
Cisco's profit jumps on AI demand, but shares dip
Cisco Systems shares dipped in extended-hours trading on Wednesday even after the company posted a spike in July-quarter profit to $3.86 billion, or $0.97 a share. Revenue jumped to $17.25 billion, above last year's $14.67 billion and ahead of Wall Street forecasts.
Analysts cited by Reuters flagged that expectations for the company were sky-high heading into the earnings. Cisco's stock has surged more than 60% so far this year, reflecting demand for the gear needed to underpin AI infrastructure builds.
CEO Chuck Robbins told the Wall Street Journal that Cisco has not experienced this level of demand across its portfolio in three decades, calling the AI boom the "fastest-moving technology transition" the company has ever seen. Cisco also guided for fiscal 2027 revenue of between $72.2 billion and $73.4 billion, topping expectations, while AI infrastructure orders from hyperscalers are seen at $7.5 billion.
Futures rise ahead of Applied Materials results
U.S. stock futures pointed higher on Thursday as investors digested July inflation data and parsed a batch of technology earnings. By 02:58 ET, Dow futures had risen 26 points, or 0.1%, S&P 500 futures had gained 6 points, or 0.1%, and Nasdaq 100 futures had added 29 points, or 0.1%.
Wall Street's main averages were mixed on Wednesday, with the S&P 500 and Nasdaq Composite advancing while the Dow Jones Industrial Average edged down marginally. AI chip equipment supplier Applied Materials is now due to report after Thursday's close, with Bloomberg consensus estimates pointing to adjusted fiscal third-quarter earnings per share of $3.42 on net sales of $9.02 billion.
PPI data next test for rate bets
July's consumer price growth cooled modestly and came in line with expectations, though the gauge remains elevated on an absolute basis. The reading bolstered wagers that the Federal Reserve will hold rates steady at its September meeting rather than hike.
Attention now shifts to Thursday's producer price index, where producer price growth is seen cooling to 4.9% from 5.5% on an annualized basis, while the month-on-month figure is expected to rebound to 0.2% from a 0.3% decline in June. Economists will use both readings to sharpen forecasts for the core personal consumption expenditures index, one of the Fed's preferred inflation gauges.
Source: Investing.com
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