Cisco Systems reported a 2% decline in its Security segment revenues in the third quarter, as continued customer migration to third-party cloud-native security platforms and lower demand for legacy on-premises appliances weighed on performance. While overall company revenues grew 7.5% year-over-year to $14.88 billion, security sales fell short of management’s targets, accounting for approximately 11% of total revenue during the quarter. The shortfall was driven by a 5% drop in hardware appliance sales and a modest 1% increase in subscription and software-as-a-service security offerings. Cisco executives highlighted that next-generation technologies, including extended detection and response (XDR) and secure access service edge (SASE) solutions, showed initial traction with large enterprise accounts, helping to partially offset the legacy decline.

Braun Stacey Associates Inc. increased its holdings in Cisco Systems by 7.5% during the third quarter, acquiring an additional 23,800 shares to bring its total stake to 341,208 shares, valued at $23.35 million as of the SEC filing date. Several other institutional investors also made incremental additions: Postrock Partners LLC lifted its position by 4.5% to 3,480 shares, Mount Vernon Associates Inc. MD added 150 shares for a total of 41,379 shares, Wynn Capital LLC purchased 150 shares raising its holdings to 48,456 shares, Old North State Trust LLC added 151 shares to reach 24,534 shares, and Lion Street Advisors LLC increased its position by 0.7% to 20,694 shares. Collectively, institutional and hedge fund ownership stands at 73.33% of outstanding shares.

Following the quarterly results, Bank of America raised its rating on Cisco Systems to Buy and lifted its one-year price target from $85 to $95, while Morgan Stanley upgraded to Overweight with a target increase from $82 to $91. Barclays moved to Equal Weight with a target of $76, and Piper Sandler adjusted its Neutral rating alongside a target increase from $70 to $86. Of 26 analysts covering the company, 17 maintain Buy ratings and nine hold to Hold, resulting in a consensus Moderate Buy. Cisco reaffirmed full-year fiscal 2026 EPS guidance of $4.080–$4.140 and Q2 guidance of $1.010–$1.030, versus the current consensus estimate of $3.04 for the fiscal year, suggesting potential upside if next-generation security and software subscriptions accelerate adoption.