What Happened?

Shares of networking technology giant Cisco (NASDAQ:CSCO) jumped 6.7% in the morning session after the company reported impressive first quarter 2025 (fiscal Q3) results which beat analysts' sales and earnings estimates. In addition, Cisco increased its EPS guidance for the next quarter. The main story here was the steady growth, with revenue up 11% thanks to strong demand for AI and security products. On the other hand, its EBITDA missed, but this print still had some key positives.

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What The Market Is Telling Us

Cisco’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 6.6% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. Markets reacted negatively to the announcement, reflecting deep concerns among investors about the broader economic implications. The tariffs were likely seen as a significant threat to global trade flows, with the potential to slow economic growth, drive up consumer prices, and spark retaliatory measures.

Wedbush analyst Dan Ives captured the prevailing market anxiety, stating, "We would characterize this slate of tariffs as 'worse than the worst case scenario' the Street was fearing." His comment highlighted how the scope and severity of the tariffs far exceeded Wall Street's expectations, adding a new layer of uncertainty for businesses and investors.

Cisco is up 9.6% since the beginning of the year, and at $64.79 per share, it is trading close to its 52-week high of $64.87 from February 2025. Investors who bought $1,000 worth of Cisco’s shares 5 years ago would now be looking at an investment worth $1,464.

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