This AI Stock Is in Sharp Decline after Wednesday Gains

Cisco Systems Inc (CSCO) saw its stock climb on Wednesday by 2%, and then the stock dropped quickly on Thursday, falling 3% before trading closed out.

The company makes network equipment, and they detailed their forecast for the fourth fiscal quarter for 20204. Cisco anticipates better revenue for the fourth quarter than analysts’ expectations, but those expectations were quite low already. The company has been helped recently by better supply chain operations, but that has not given the company the boost it needs to keep its stock high.

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The company is bringing in more revenue thanks to companies needing cloud computing solutions and artificial intelligence software. However, Cisco’s revenue is down and has stayed down for two quarters in a row. The company is sitting on a large inventory that it cannot sell, and they are currently planning on how to get rid of the excess stock.

The company earned $1.89 billion in net revenue, which is a massive drop from where the company was last year. For the same quarter in 2023, Cisco brought in $3.21 billion.

Will Cisco’s Stock Recover?

The company expects to see some improvement in key areas, particularly in its corporate networking sector and in its core internet service. The company reported that these sectors are returning to normal.

By July, Cisco expects that many of its customers will have integrated the company’s products into their systems, and that should clear up the company’s backlog. The company said that its sales have been slow due to customers trying to figure out and install previous products they bought from Cisco.

For the next fiscal quarter for 2024, Cisco expects earnings in the range of $53.6-$53.8 billion. That is higher than their previous forecast for that quarter, and if those estimates hold true, then the company may see its stock price rise.

 

 

 

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ABOUT THE AUTHOR See More
Timothy St. John
Timothy St. John
Financial Writer - European & US Desks
Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.
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