Three large technology names are in focus Friday morning after a busy Thursday of earnings and headlines. Here is what happened and why investors are paying attention.
Cisco Systems (CSCO)
Cisco reported fiscal first-quarter revenue of $18.5 billion, up 24% from a year earlier, according to the company’s earnings release. Product revenue rose 32%, while services revenue edged up 1%. Adjusted earnings came in at $1.40 per share, up 40%, topping the roughly $1.33 analysts expected, according to Stocktwits.
The networking company also raised its outlook. Cisco now expects fiscal 2027 revenue of $74.8 billion to $75.8 billion and adjusted earnings of $5.47 to $5.53 per share. It also lifted its expectation for AI infrastructure revenue from hyperscale cloud customers to $9 billion this fiscal year, more than double the prior year’s total. CEO Chuck Robbins said the quarter delivered the company’s strongest revenue and earnings growth rates in over 15 years.
The reaction has been mixed. Shares jumped about 4% shortly after the report, according to Investing.com, but were down about 2% to 3% in Friday premarket trading, per Stocktwits. One possible factor: Cisco’s adjusted product gross margin fell to 63.7% from 67.2% a year earlier, according to the release.
Applied Materials (AMAT)
The chip equipment maker reported record fourth-quarter revenue of $10.41 billion, up 53% from a year earlier, according to its earnings release. Adjusted earnings rose 92% to $4.16 per share, while GAAP earnings were $3.40 per share. For the full fiscal year, revenue climbed 21% to $34.45 billion.
Looking ahead, Applied Materials guided for first-quarter fiscal 2027 revenue of about $11.1 billion, plus or minus $500 million, and adjusted earnings of about $4.35 per share. CEO Gary Dickerson said record demand for chips should continue, and that 2027 is expected to set another record, according to Stocktwits. The stock was modestly higher before the bell.
Microsoft (MSFT)
Microsoft shares were down about 2.5% in premarket trading after outages affected Outlook, Teams and Copilot on Thursday, according to Stocktwits. The company paused deployments while it worked on the problems. Investors will watch for an explanation of the cause and whether the disruption affects business customers’ confidence in its cloud and AI tools.
The bigger picture
All three companies sit at the heart of the AI spending wave, and all three now face a market that is also wrestling with rising interest rates. The 10-year Treasury yield touched 5.10% on Thursday, according to Yahoo Finance, and Friday’s producer price report could shape expectations for a December Fed rate hike. Nvidia’s earnings on Tuesday will be the next major checkpoint for the sector.
This article is for informational purposes only and is not a recommendation to buy or sell any security.
