Cisco Systems stock (NASDAQ:CSCO) rose in 2021 as the market shifted to “value” companies linked to reopening the US economy. CSCO stock (NASDAQ:CSCO) has fallen this year as interest rates have risen and supply-chain difficulties have arisen.
Analysts that are positive on CSCO stock (NASDAQ:CSCO) believe the business will acquire market share from Arista Networks in the cloud computing market (ANET). Arista beat Cisco to the cloud data center market by acquiring clients from Microsoft (MSFT), Facebook (FB), and Amazon.com (AMZN).
ANET Stock vs. Cisco Stock
However, other experts believe Arista will remain the market leader in cloud networking. On September 30, ANET stock was selected as the IBD Stock of the Day.
In the research, Barclays analyst Tim Long said, “We anticipate the robust mid-teens growth rate for ANET will be sustained for a few more years.” “We anticipate that market share in the data center switching industry will continue to rise. “ANET has effectively diversified its income streams away from its two main clients, Microsoft and Facebook.”
According to IBD Stock Check-up, Arista stock has an IBD Relative Strength Rating of 90 out of a possible 99. However, cloud infrastructure expenditure is likely to decline in 2023 as well.
Cisco stock (NASDAQ:CSCO) rose upon the release of its fiscal fourth-quarter results report on August 17. Cisco provided a revenue projection for fiscal 2023 that was higher than anticipated. Analysts, however, disagreed with the forecast for profit margins as supply chain difficulties eased.
The forecast for Cisco stock (NASDAQ:CSCO) is determined by changes in cloud computing infrastructure investment as well as business and telecom network spending. Concerns about a US recession are growing.
CSCO Stock Underperforms vs. the S&P 500.
In 2021, Cisco stock (NASDAQ:CSCO) increased by 41%. In 2022, Cisco stock fell almost 36% amid a bear market in the tech-heavy Nasdaq composite. Furthermore, CSCO stock has lagged behind the S&P 500, which is down 24%.
Investors should be wary of any purchases during the bear market and if the Fed rate rises.
The IT titan intends to diversify away from its main business of selling network switches and routers to boost recurring income from subscription-based software and services.
CSCO Stock: Market Analysis for Third Quarter
Adjusted profits per share for the July quarter were 83 cents per share, a 1% decrease from the previous year. Including acquisitions, revenue remained steady at $13.1 billion.
According to FactSet, analysts expected Cisco to earn 82 cents per share on $12.73 billion in sales.
Cisco expects earnings in the October quarter to range from 82 cents to 84 cents, compared to analyst projections of 84 cents. Cisco forecasted revenue growth of 2% to 4%, compared to flat sales growth.
To be actionable as of October 10, CSCO stock must create a new base.
Featured Image – Megapixl © Wolterk
Author Okoro Chinedu 
