Cisco’s stock remains above $70 after earnings

Today’s headlines

What’s happening: Shares of Cisco Systems edged higher in after-hours trading on Wednesday, after the company released its fiscal fourth-quarter results.

What happened: The networking equipment maker posted stronger-than-expected sales and earnings for the latest quarter.

Cisco also issued upbeat guidance for the first quarter and fiscal 2026 as a surge in AI investments drove demand for the company’s networking equipment.

How were the results: The San Jose, California-based company reported single-digit sales growth for the fourth quarter ended July 26.

• Revenues grew 8% year-over-year to $14.67 billion, surpassing consensus estimates of $14.62 billion.
• Adjusted earnings came in at 99 cents per share, beating Wall Street expectations of 97 cents per share.

Why it matters: US big tech companies, including Amazon, Microsoft, Amazon and Alphabet, have continued to accelerate their spending to meet rising AI usage, despite huge investments over the past several quarters.

Cisco’s CEO Chuck Robbins said that the company’s AI infrastructure orders surpassed $800 million in the latest quarter. This brought the total to more than $2 billion for fiscal 2025, which is more than double its original target. Networking product orders also surged in the double digits in the fourth quarter.

Product revenue, which represents the lion’s share of the company’s overall revenue, surged 10% year-over-year, while services revenue came in flat.

Management guided to revenues between $14.65 billion and $14.85 billion for the first quarter of fiscal 2026, higher than market estimates of $14.62 billion, and adjusted earnings of 97 cents to 99 cents per share, versus expectations of 97 cents per share.

Cisco guided to fiscal 2026 revenue of $59 billion to $60 billion, ahead of market estimates of $56.62 billion, and adjusted earnings of $4.00 to $4.06 per share, versus expectations of $3.79 per share.

How shares responded: Prior to this month, $70 had been a strong resistance level. Shares of Cisco Systems steeply in anticipation of the latest quarterly results, breaching $70 for the first time in five years on August 7 and remained comfortably above this mark. The stock rose 0.1% to $70.37 in extended trading hours on Wednesday following the release of the quarterly results.

What to watch: Investors will continue monitoring tariff-related announcements from the Trump administration, which are expected to impact the company’s revenue ahead.

The markets today

Crude oil in focus today after falling to its lowest level in over two months on Wednesday

Context: Crude oil prices recovered slightly this morning as investors digested the latest crude stockpiles report from the Energy Information Administration (EIA).

Details: Data released on Wednesday showed that US crude oil inventories grew by 3.037 million barrels in the week ended August 8, compared to market estimates of a decline of 0.8 million barrels. Meanwhile, stockpiles in the Cushing, Oklahoma, delivery hub rose by 45,000 barrels.

Gasoline inventories fell by 0.792 million barrels last week, while stockpiles of distillate fuels rose by 0.714 million barrels.

Oil prices also came under pressure on Wednesday after the International Energy Agency said it expects surplus to grow in 2025 and 2026. Inventories are projected to surge at a record pace and reach a 46-month high level by June next year.

Weakness in the US dollar lent support to oil prices this morning, as a lower greenback makes commodities cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell 0.1% to 97.73.

WTI crude oil prices rose 0.5% to trade at $62.95 a barrel this morning, while Brent crude climbed 0.5% to $65.96 a barrel.

In other energy trading, gasoline gained 0.8% to $2.0861, while natural gas rose 0.2% to $2.834. Heating oil also climbed by 0.4% to $2.2517.

What to watch: Markets will monitor data released by the EIA on natural gas stockpiles (1830 UAE Time) today. US natural gas inventories rose 7 billion cubic feet in the week ending August 1, which brought total inventories to 3.130 trillion cubic feet.

Tariff-related announcements and talks between the US and Russia will also remain in focus.

Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.04%, 0.32% and 0.04%, respectively.

The news shaping the markets

US President Donald Trump warned of “severe consequences” if Russia does not agree to a peace deal in Ukraine. The news sent the RUB/USD pair lower in forex trading this morning.

Australia’s employment rose by 24,500 to a record high of 14.64 million in July, up from a 1,000 gain in the previous month, lending support to the AUD/USD forex pair.

Chile’s state copper commission, Cochilco, slashed its output growth outlook for 2025 from 3% to 1.5%, which sent the CLP/USD pair lower in forex trading this morning.

South Korea’s export prices declined 4.3% year-over-year in July, after a 4.5% plunge in the previous month. The country’s export prices falling for the third straight month exerted pressure on the KRW/USD forex pair.

Colombia’s consumer confidence surged to 5.3% in July, up 3.1 points from the previous month, sending the COP/USD pair higher in forex trading this morning.

What else to watch today

UK’s labour productivity (1230 UAE Time) and NIESR monthly GDP tracker (1600 UAE Time), Eurozone’s employment change (1300 UAE Time), industrial production (1300 UAE Time) and GDP growth rate (1300 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), US PPI (1630 UAE Time), initial jobless claims (1630 UAE Time), continuing jobless claims (1630 UAE Time), 4-week Bill auction (1930 UAE Time), 8-week Bill auction (1930 UAE Time), 15-year Mortgage Rate (2000 UAE Time) and 30-year Mortgage Rate (2000 UAE Time), Russia’s current account (1700 UAE Time), as well as Canada’s 2-year Bond auction (2000 UAE Time).