Cisco stock sinks 5% after Piper Sandler cuts price target on growth concerns

By the Editorial Team · Wednesday, September 23, 2026

Cisco Systems’ shares dropped nearly 5% after Piper Sandler lowered its price target to $125, citing concerns that industry growth may be slowing following a strong run fueled by AI investment. Despite robust recent earnings and optimistic guidance for fiscal 2027, investor uncertainty remains over the sustainability of Cisco’s revenue growth amid a plateauing market.

Shares of Cisco Systems declined nearly 5% on Tuesday following a reduction in the company’s price target from Piper Sandler, which lowered its estimate to $125 from $132 amid concerns that industry growth may be reaching a plateau. The networking giant’s shares closed at $106.44 after hitting an all-time high in June, reflecting a 57% increase over the past year as demand surged during the artificial intelligence (AI) expansion.

Piper Sandler analysts pointed to expectations of a lower price-to-earnings multiple, influenced by worries that Cisco’s growth momentum may be slowing down after a significant run-up fueled by increased spending from large technology firms investing in AI infrastructure. Despite a robust performance in its recent fiscal results, questions remain about the sustainability of the company’s revenue growth.

Last month, Cisco reported fourth-quarter revenue of $17.25 billion, surpassing analyst estimates of $16.8 billion. During its August earnings call, the company also provided strong guidance for fiscal year 2027, forecasting nearly 15% revenue growth. However, this outlook received a mixed response from market analysts, some of whom argued that sales growth could return to single-digit levels, making Cisco’s projection appear conservative in the context of broader market demand.

“We’re starting a new fiscal year. We’re operating in incredible markets,” Cisco CEO Chuck Robbins said in an interview last month, emphasizing a cautious but optimistic approach moving forward. “But it’s also a time that we’re going to start the year being a little bit prudent.”

Cisco’s business with hyperscale customers—large cloud and internet providers—generated about $4 billion in revenue during fiscal 2026. The company anticipates this figure nearly doubling to approximately $7.5 billion in fiscal 2027, underscoring its reliance on these key customers for growth amid evolving industry dynamics.

The pullback in Cisco’s stock reflects broader investor uncertainty about how quickly growth can be sustained in the competitive networking sector, particularly as the initial surge in AI investment begins to normalize.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.