Cisco Stock At $101: Is Networking The AI Trade Nobody Sold

More on the AI trade: our AI storyline page collects our pieces on AI stocks.

Is networking the AI trade nobody sold? Not quite: it was sold less. In the month to Wednesday, Cisco fell 15% and Arista 9%, against 24% for Nvidia and about 21% for Micron. On Wednesday, as CoreWeave's report lifted the AI trade, Arista rose 6% and Cisco 3%. The number that decides Thursday is Cisco's AI infrastructure orders from the biggest cloud companies: $4 billion last quarter, $9.3 billion last fiscal year. Arista, the networking pure play, just grew revenue 58.5%. If Cisco's orders keep pace, networking stays the AI trade that held up. If not, the gap with Arista becomes the story.

Cisco's report moves Arista too. After each of Cisco's last four reports, Cisco moved between 4.6% and 13.4%, up or down, the next day, and Arista moved the same way three times.

That orders number is the decision this report forces. For families with seven figures invested, would you hold Cisco through $82, or add? A Trefis partner firm can give you a second opinion in a free 15-minute call.

Is This 2000 Again?

Not on valuation. Cisco was worth more than $500 billion in 2000; today it is worth about $398 billion, at about 20 times guided earnings. That is not a bubble. But "not a bubble" never meant "can't fall further." Cisco closed Wednesday 22% below its June 4 record close of $130.00.

What Happened The Last Four Times Cisco Fell 25%?

Each time since 2003 that Cisco first fell 25% below its peak close, the highest since 2003 (dividends included):

Four times out of four, Cisco fell further, to 37-58% below that high, within the year.

So how low can it go? Those four lows, measured from the $130.00 record close, land between about $82 and $55: 18% to 45% below Wednesday's close. A year later it was higher twice and lower twice. Four cases, two inside market-wide crashes: a range to plan around, not a forecast.

Two Leaders, Two Crashes: How Long Did The Way Back Take?

Prices only, dividends not included.

Buy Cisco on its best day in 2000 and you waited until December 2025 to get that price back (August 2021 with dividends). The business wasn't the problem. The price was.

Where Does Cisco Sit Next To Its AI Peers?

What Should You Watch On Thursday?

Cisco reports after the close on Thursday, November 12. Besides the orders, the bar is $7.5 billion of AI infrastructure revenue from the biggest cloud companies expected this fiscal year and $18.0-18.2 billion of quarterly revenue. In August Cisco topped its own guidance and raised its AI outlook, and the shares still fell about 8% the next day. The same move from Wednesday's close would mean about $92.

What Should You Do Whichever Way Thursday Goes?

1. Size for the bad case. The 2008 case means about $55, 45% below Wednesday's close. Own only what you could hold through that.

2. Spread the buying across prices you choose now. For education only: split a $30,000 target into thirds at $100.76, about $82 and about $76, where the 2022 and 2004 cases bottomed. If all fill, your average is about $85; at $55 you'd be down about 35%, against 45% buying it all now. Set the lower buys as limit orders.

3. Count what you already own. An S&P 500 fund holds Cisco and Nvidia; see how much Nvidia you really own.

Networking was sold less than Nvidia and Micron, not spared. Thursday's AI orders, against Arista's 58% growth, decide whether that holds. Cisco's own history says a 25% fall usually went further, about $82 to $55 today. Size for $55, spread your buys, and sell the thesis, not the price: judge Thursday by the orders.

What Should You Ask Next?

Would Your Plan Survive Another Leg Down?

The AI build-out may be real; the price you pay still decides your returns. If you have $1 million or more invested, get a second opinion from a Trefis expert partner advisor in a free 15-minute call, or let Invest With Trefis run the plan for you.

For questions about this article or underlying research, email [email protected].