Cisco shares fall as investors weigh AI growth against tech sector weakness

Cisco Systems shares fell on Friday, as weakness in the broader technology sector overshadowed bullish post-earnings commentary and the networking giant's increasingly aggressive push into artificial intelligence infrastructure.

The technology sector was the weakest performer in the S&P 500, falling 0.71%, even as the broader index edged up 0.02%. The Nasdaq slipped 0.27%, while the Dow Jones Industrial Average gained 0.11%.

The decline in Cisco's stock comes after a strong 12-month run, suggesting the shares have recently cooled as investors rotate into stronger areas of the market. The communication services sector rose 1.06% following a very strong period.

• Cisco Systems faces resistance. Why is CSCO stock falling?

Cramer remains bullish on Cisco after earnings beat

On CNBC's "Mad Money Lightning Round," Jim Cramer reiterated his bullish view on Cisco, saying the company had a "very good quarter" and that management's guidance was "very conservative."

Earlier this month, Cisco reported fiscal fourth-quarter results that beat expectations.

The company guided fiscal 2027 revenue to a range of $72.2 billion to $73.4 billion, above the $68.69 billion consensus estimate. Adjusted earnings per share guidance came in at $5.05 to $5.11, also above the $4.80 expected.

Cisco deepens AI infrastructure push

Cisco is also expanding its AI infrastructure strategy, with a secure AI factory solution integrated with Super Micro Computer expected to launch in October 2026.

The company is targeting increasingly dense GPU systems, including Nvidia's Vera Rubin NVL72 and HGX Rubin NVL8 platforms, while incorporating rack-to-architecture liquid cooling into its infrastructure products.

Cisco highlighted the growing importance of thermal and power constraints, noting that "power and cooling determine where infrastructure can be built," as AI data centers transition to liquid cooling.

CSCO technicals show recent consolidation

Cisco remains in a long-term uptrend, up 59.33% over the past 12 months and trading well above its 200-day simple moving average of $93.91.

However, recent momentum has faded. The stock is currently about 4.1% below both its 20-day moving average of $115.28 and its 50-day moving average of $115.37.

This positioning below short-term moving averages but above the long-term trend line suggests consolidation may continue unless bulls reclaim the 20-day and 50-day levels.

Momentum indicators also remain cautious. The MACD is below its signal line, with a negative histogram, indicating waning upside momentum.

Key resistance: $121.50 — a level where rallies could face selling pressure.

Key support: $109 — near the 100-day moving average of $109.84. A break below this zone could shift focus to lower trend support.

Edge scoring highlights momentum and quality

Cisco's Edge scoring card shows its strongest attributes remain momentum and quality:

Momentum: 89.06/100 — despite recent consolidation, Cisco maintains a strong long-term trend.

Quality: 85.94/100 — this score points to relatively solid fundamentals.

Value: 16/100 — a low score suggests valuation remains a potential headwind.

Growth: 10.95/100 — this low reading could matter if investors increasingly favor faster-growing tech names.

Therefore, Cisco's Edge profile is primarily supported by momentum and quality, while valuation and growth scores represent potential constraints.

CSCO stock price action: As of Friday's close, Cisco Systems shares were down 1.81% at $110.12.