How Is Cisco Systems' Stock Performance Compared to Other Telecommunications Stocks?

San Jose, California-based Cisco Systems, Inc. (CSCO) designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry. With a market cap of $433.3 billion, the company offers enterprise network security, software development, data collaboration, cloud computing, and other related services.

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and CSCO definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance within the communication equipment industry. Cisco stands as a titan in the networking industry, bolstered by its formidable market share and brand reputation. Cisco's brand is synonymous with reliability and innovation in networking, cybersecurity, and collaboration products, which has helped it maintain a loyal customer base and attract new clients.

Despite its notable strength, CSCO slipped 15.5% from its 52-week high of $130.37, achieved on Jun. 4. Over the past three months, CSCO stock declined 7.9%, underperforming the iShares U.S. Telecommunications ETF’s (IYZ) 3.3% dip during the same time frame.

Shares of CSCO rose 44% on a YTD basis and climbed 59.8% over the past 52 weeks, outperforming IYZ’s YTD gains of 27.3% and 36.7% returns over the last year.

To confirm the bullish trend, CSCO has been trading above its 200-day moving average over the past year. However, the stock has been trading below its 50-day moving average since mid-August. 

CSCO outperformed on record revenue, driven by surging AI networking demand from hyperscalers and broad-based strength across enterprise, public sector, service provider/cloud, telco and industrial IoT. AI-related orders reached $4 billion in Q4, marking an eighth straight quarter of double-digit networking growth. Security, including Splunk, also saw double-digit order growth with firewalls up over 30%. While gross margin was pressured by hardware mix and memory costs, management guided to continued momentum from AI infrastructure, Silicon One, security and new platforms like Cisco Cloud Control, calling it the early stages of a networking super cycle.

On Aug. 12, CSCO shares closed up by 2.9% after reporting its Q4 results. Its adjusted EPS of $1.22 beat Wall Street expectations of $1.17. The company’s revenue was $17.3 billion, topping Wall Street forecasts of $16.9 billion. CSCO expects full-year adjusted EPS in the range of $5.05 to $5.11, and revenue ranging from $72.2 billion to $73.4 billion.

In the competitive arena of communication equipment, Hewlett Packard Enterprise Company (HPE) has taken the lead over CSCO, showing resilience with a 119.7% uptick on a YTD basis and solid 127.8% gains over the past 52 weeks.

Wall Street analysts are reasonably bullish on CSCO’s prospects. The stock has a consensus “Moderate Buy” rating from the 25 analysts covering it, and the mean price target of $134.14 suggests a potential upside of 21.7% from current price levels.