Cisco Systems' stock declined 20% from its peak this year, entering a bear market. Investors attribute the drop to profit-taking after a period of strong performance.
This trend persisted even after the company released a positive earnings report on August 12. The report showed an 18% revenue increase. Revenue reached $17.3 billion, driven by strong demand from hyperscalers.
Cisco's recent results highlighted surging AI infrastructure orders. These orders reached $4 billion in the last quarter alone.
Despite strong fundamental performance, the stock's momentum weakened compared to other IT leaders. Some analysts note a bearish technical setup.
The stock trades near a technical support level. Investors weigh its 'fair' valuation against the risk of a slowdown in AI demand.