Cisco falls about 5% after Piper Sandler cut; hyperscalers are 6% of sales but over a third of planned growth

Cisco shares fell about 4.7% to $106.24 in late afternoon trading on Tuesday, according to Nasdaq data, after Piper Sandler cut its price target to $125 from $132. CNBC reported that the analysts pointed to lower earnings-multiple expectations on concern that growth across the networking industry is peaking. At that price the company is worth roughly $419 billion, and the stock sits about 18.5% below its 52-week high of $130.37.

The drop comes against a strong backdrop. The stock is up about 56% over the past year, CNBC noted, and Cisco's last quarter set records.

The quarter that set this up

In its fiscal fourth-quarter release on August 12, Cisco reported:

• Revenue of $17.3 billion, up 18%, with product revenue up 24% and services flat.
• Networking product revenue up 28%, and networking product orders up 40%.
• Non-GAAP earnings of $1.22 a share, up 23%.
• Full-year revenue of $63.3 billion, up 12%.
• Fiscal 2027 guidance of $72.2 billion to $73.4 billion in revenue and $5.05 to $5.11 in non-GAAP earnings per share.

The number behind the growth forecast

The release also says Cisco delivered about $4 billion of AI infrastructure revenue to hyperscalers, the largest cloud operators, in fiscal 2026 and expects $7.5 billion in fiscal 2027. Put that next to the guidance and the dependence becomes clearer:

That is our arithmetic from Cisco's own figures. The hyperscaler business was about 6% of last year's revenue, but its expected $3.5 billion increase accounts for roughly 35% to 39% of the total growth Cisco has guided to. Strip it out and the rest of the company is forecast to grow 9% to 11%, a solid rate but closer to the single-digit growth CNBC says analysts expected after the August report than the headline 15%.

That is the core of the peaking-growth worry. If a few cloud buyers slow their spending, a large share of next year's growth goes with them. The flip side, which Piper itself made according to CNBC, is that the analysts called Cisco's outlook "conservative" given demand.

What traders are watching

At $106.24, Cisco trades at about 21 times the top and bottom of its fiscal 2027 non-GAAP earnings guidance. The next test is fiscal first-quarter results, where Cisco has guided to $18.0 billion to $18.2 billion in revenue. Hyperscaler orders, which reached $9.3 billion for fiscal 2026 according to the release, are the figure most likely to move the stock.

Cisco fell on a day when the Nasdaq hit an intraday record, according to Reuters and CNBC, a reminder that the AI trade is no longer lifting every supplier together. For the chip side of that story, see AMD's run past $1 trillion, and the markets board for live index levels.

Sources: CNBC, Cisco investor relations, Nasdaq quote data. Prices as of 3:51 p.m. ET. This is market information, not investment advice.