Cisco

Posted on | by Leon Hinde | Leave a Comment on Cisco

Cisco Systems, Inc. – Common recently reported strong results for its second fiscal quarter (ended January 2024, reported Feb 2026):

Earnings Beat: Reported record revenue of $15.3 billion (+10% YoY) and non-GAAP EPS of $1.04, exceeding analyst expectations.

Guidance: For the full fiscal year 2026, Cisco raised its revenue outlook to $61.2B–$61.7B.

As of March 2026, Cisco (CSCO) is undergoing a major transition from a traditional hardware-focused networking company into an AI-infrastructure and cybersecurity powerhouse.

Here are the key takeaways you should know:

### 1. Recent Financial Performance (Q2 FY2026)
Cisco recently reported strong results for its second fiscal quarter (ended January 2024, reported Feb 2026):

  • Earnings Beat: Reported record revenue of $15.3 billion (+10% YoY) and non-GAAP EPS of $1.04, exceeding analyst expectations.
  • Market Reaction: Despite the beat, the stock saw a ~9% post-earnings dip (trading around $75–$78) as investors weighed short-term margin pressures against long-term AI growth.
  • Guidance: For the full fiscal year 2026, Cisco raised its revenue outlook to $61.2B–$61.7B.

### 2. The AI Growth Engine
AI is currently the most significant driver for Cisco.

  • AI Orders: The company took $2.1 billion in AI infrastructure orders from hyperscalers (like Amazon, Google, Meta) in Q2 alone.
  • Raised Targets: Cisco now expects total AI orders to exceed $5 billion for FY2026.
  • New Silicon: They recently unveiled the Silicon One G300 chip, designed specifically for massive AI clusters, positioning them as a direct competitor to Broadcom in the high-end networking space.

### 3. Strategic Shift: Cybersecurity & Splunk
Cisco is aggressively moving toward a software-subscription model to reduce “lumpy” hardware revenue.

  • Splunk Integration: Following its $28 billion acquisition, Splunk is being deeply integrated. Security is now viewed as a “native function” of the network rather than an add-on.
  • Recurring Revenue: Annual Recurring Revenue (ARR) has reached $31.4 billion, with software and services now making up a significant portion of the business.
  • Backlog (RPO): Cisco has a massive backlog of $43.4 billion in Remaining Performance Obligations, providing high visibility for future revenue.

### 4. Valuation and Dividends
For income-focused investors, Cisco remains a “Dividend Aristocrat” in the making:

  • Dividend: Recently increased to $0.42 per quarter (approx. 2.2% yield).
  • Capital Returns: The company returned $3 billion to shareholders last quarter ($1.6B dividends, $1.4B buybacks) and still has $10.8 billion authorized for further buybacks.
  • P/E Ratio: Currently trades at a forward P/E of roughly 25x–27x, which is slightly below the sector median, leading many analysts to view it as undervalued relative to its AI growth potential.

### 5. Analyst Outlook

  • Consensus: Most analysts hold a “Moderate Buy” rating.
  • Price Targets: Average targets range between $89 and $96, suggesting a potential upside of 15% to 24% from current levels.
  • Key Risks: Watch for margin pressure from rising component costs (like memory) and the speed of enterprise AI adoption beyond just the giant “hyperscalers.”

Summary for Investors: Cisco is no longer just “the router company.” It is a massive play on the plumbing required to run AI models and the security required to protect them. The current valuation reflects a transition phase that may offer a more conservative entry point into the AI trade compared to high-flyers like Nvidia.

Atlassian

Posted on | by Leon Hinde | Leave a Comment on Atlassian

Atlassian Corporation – Class A Common is currently exhibiting a “bottom bounce” technical pattern, with recent volume support helping the stock stabilise after falling nearly 48% year-to-date and 84% from its all-time high.

The trading volume for Atlassian (TEAM) has seen significant increases since January, characterized by three primary waves of activity linked to earnings milestones, institutional conferences, and a broader sector rotation.

### 1. February Earnings Spike (The Primary Surge)
The most substantial increase in volume occurred in early February following the company’s Q2 fiscal 2026 earnings report on February 5.

  • Volume Peak: Trading reached approximately 14 million shares on February 6, nearly double the session volume of the preceding days and significantly higher than the ~3 million daily average seen in early January.
  • Driver: While Atlassian surpassed $1 billion in quarterly Cloud revenue for the first time, high GAAP operating losses (driven by share-based compensation) led to a sharp -6.3% price dip, triggering high-volume sell-offs and re-positioning.

### 2. March “Relief Rally” & Conference Surge
A second wave of elevated volume occurred in the first week of March, specifically around March 5.

  • Volume Spike: The stock saw a high-volume session of 12.19 million shares as it jumped +7.4% in a single day.
  • Driver:

* Morgan Stanley TMT Conference: Management presented on March 5, highlighting their AI product (Rovo) and its 5 million monthly active users.
* Sector Rotation: A broader “relief rally” swept the software sector as investors rotated back into beaten-down SaaS names, leading to high turnover in TEAM.

### 3. Overall Trend Comparison
The average daily volume (ADV) has shifted higher throughout the quarter:

  • Early January: ~3.0M – 4.5M shares per day.
  • February Average: Elevated by volatility, often hitting 8M+ on high-activity days.
  • March Status: Currently averaging between 7.0M and 7.5M shares, indicating a sustained increase in market interest as the stock tests multi-year lows.

### Summary of Drivers

Institutional Flows: Large-scale positioning updates from firms like Morgan Stanley and DNB Asset Management (which grew its stake by 266% recently) have contributed to the increased liquidity and trade frequency since the start of the year.

AI Narrative Shift: Market sentiment transitioned from “AI fears” (concerns that AI would disrupt software) to “AI adoption” (viewing Rovo as a monetization catalyst).

Boeing

Posted on | by Leon Hinde | Leave a Comment on Boeing

Boeing Company (The) Common is under Algo Engine buy conditions.

Based on the latest fundamental data for Boeing (BA.NYS), the outlook for EPS growth is characterized by a significant projected recovery following recent challenges.

EPS Growth Outlook

  • Significant Forward Growth: Analysts are projecting a substantial jump in earnings. The EPS Current Year stands at 0.3863, while the EPS Forward estimate is 4.7037. This indicates a massive expected rebound in profitability over the next 12 months.
  • Trailing Performance: The EPS for the Trailing Twelve Months (TTM) is 2.48, suggesting that while the company has returned to positive territory, the next year is expected to see a more aggressive acceleration in earnings.

Valuation Metrics

Forward P/E Ratio: 45.52. This suggests that while the stock is trading at a high multiple of expected earnings, investors are pricing in the transition from a recovery phase back to normalized operations.