Cisco Systems Downgraded to Hold as Gross Margin Forecast Cut to 66%
Erste Group cut Cisco’s rating from Buy to Hold, forecasting gross margin to fall to 66% next quarter due to rising DRAM and memory costs. Separately, Cisco expanded its long-standing partnership with AT&T to launch a 5G Standalone IoT platform integrating AT&T’s nationwide SA core with Cisco’s Mobility Services Platform.
1. Analyst Downgrades Cisco to Hold
Erste Group lowered Cisco’s rating from Buy to Hold, citing concerns over declining gross margins driven by rising DRAM and memory component costs. While the firm still expects revenue growth in fiscal 2026, it warned that sustained margin pressures could challenge overall profitability.
2. Expansion of 5G Standalone IoT Platform
Cisco and AT&T are scaling their partnership to commercially launch a 5G Standalone-native IoT platform, combining AT&T’s nationwide SA core with Cisco’s Mobility Services Platform portfolio. The initiative offers programmable network slicing and application-aware performance to support enterprise IoT use cases such as digital healthcare, smart cities and connected vehicles.