Cisco shares dropped 9% on Thursday, as the networking equipment vendor's better-than-expected earnings report and strong guidance failed to impress Wall Street.
The company said revenue in the current quarter will be between $18 billion and $18.2 billion, topping the $16.8 billion average estimate, according to LSEG. Revenue in the fiscal fourth quarter increased 18% to $17. 3 billion, while analysts were looking for $16.8 billion.
Analysts at Piper Sandler wrote, in a note after the report, that Cisco showed good numbers for the quarter, but their guidance "looks conservative given the current demand environment." Some investors "may start to nitpick that we're seeing peak growth," wrote the analysts, who recommend holding the stock.
Heading into earnings, Cisco shares were up more than 60% for the year, as the company finally started to show that it was benefitting from the artificial intelligence boom. Even though the forecast for this year is solid, with Cisco projecting revenue growth of about 15%, analysts see sales growth dipping next fiscal year back into the single digits.
