Street View: Cisco hit by memory costs but growth drivers intact

Cisco Systems CSCO.O posted quarterly adjusted gross margins that missed market estimates on Wednesday, as the networking equipment maker faced pressure from a global surge in memory prices

Shares down 7.45% to $79.17 in premarket trading

GROWTH DRIVERS STILL INTACT

Morgan Stanley ("overweight," PT: $91) says higher memory prices are only now flowing through costs and weighing on margins, but notes that recent price hikes and a larger software mix should help ease this pressure over time

J.P. Morgan ("overweight," PT: $95)says accelerating AI orders and sustained strength in non‑AI order demand improve visibility for growth to pick up in FY27

Morningstar (fair value: $75) says campus and enterprise networking still make up a larger share of co's business, and it sees a strong upgrade cycle in this area supporting unusually high growth next year

Evercore ISI ("outperform," PT: $100) says co is well‑positioned for faster networking growth in FY26 and FY27, supported by AI momentum, a campus‑network refresh cycle and stronger demand from enterprise and government customers