Wednesday, April 24, 2019
Home Entertainment Cisco is looking at geopolitical turmoil and the downturn in the cloud,...

Cisco is looking at geopolitical turmoil and the downturn in the cloud, and stock prices are rising

Throughout the earnings season, equity and sentiment has changed due to tech companies' complaints about weakening customer orders due to geopolitical turmoil and a slowdown in the data center equipment market.

Cisco Systems Inc.

CSCO, -0.81%

but it seems good.

The network giant, which is seen by some investors as a barometer for the tech ecosystem and the global market, reported strong gains on Wednesday afternoon pushing stocks higher. This price nearly doubled after Chief Executive Chuck Robbins made a paging comment on macroeconomic uncertainty in a teleconference that disproved all doubts about this report.

"I was amazed at the resilience we have seen around the world in the face of the macroeconomic environment and geopolitical dynamics, be it a deadlock, a US-China trade, a Brexit or a stress in Italy. or there are political turmoil in certain emerging markets, "said Robbins.

"In the last 90 days I have not found a general difference in the discussions we have had, except that we talked to a client who is very active in the Chinese market. But even then they talk about the implications of the geopolitical situation, but they never connect them with any kind of spending shift, "Robbins continued. "Some may do that, but I have no conversations. Everyone seems to be moving in the place he was three or six months ago. "

See also: 20 companies that increase their sales and earn margins to drive their shares further

An increase of just over 2% after the hours rose to over 4%, according to Robbins comments. In a subsequent interview with MarketWatch, CFO Kelly Kramer said it was a "relief" for investors who feared that the negative headlines would also affect Cisco.

"People assumed we needed to fight more because of the geopolitical environment," she said.

Apart from concerns over spending in China and economic turmoil, the big concern over technology is a slowdown in cloud build-up as the chip companies reported slower sales growth in data center sales. While Kramer admitted that the Cisco data center server sales had declined compared to last year, she noted that other products, such For example, switches and routers sold in the cloud market performed well, and server sales in America, Cisco's largest market, rose.

Robbins joked that suddenly it was a good thing that Cisco did not have much to do in the cloud market. However, Kramer was more specific in terms of Cisco's broad customer base, noting that many of the companies that had difficulty focused on just one end of the market, especially large cloud vendors like Inc.

AMZN, + 0.12%

, Microsoft Corp.

MSFT, -0.07%

and Alphabet Inc.

GPL, + 0.09%

Gb, -0.11%

in the USA and Alibaba Group Holding Ltd.

BABA, + 0.41%

and others in China.

Opinion: Nvidia is the latest sign that the cloud boom is dying

"The data center market is not just web-based people," Kramer said, adding, "their spending growth seems to be slowing down."

Cisco's color and numbers suggest that the company benefits from having customers in a variety of industries, from small to unbelievably large, and a company that can encourage these customers to completely redesign their technical infrastructure. Managers are not worried about the future. They expect earnings and revenue for the current quarter to grow faster than Wall Street expects.

If the geopolitical environment and the slowing down of the cloud came to Cisco, it would have been a big distress signal. Instead, Cisco's earnings report shows that it does well in this time of technical discomfort, which should reassure Wall Street, at least for the moment.

Would you like to send this type of analysis to your inbox? Subscribe to MarketWatch's free MarketWatch First Takes newsletter. Sign up here.



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Must Read

Nailed It! Returns for Season 3 With Marvel, Michelangelo and Creepy Clown Cakes

Has your life been missing baking disasters? Fear not, Nailed It! season three is almost here.Netflix revealed the fan-favorite cake baking series on May...

Brexit: Theresa May's approval of Tory members has hit a record low, according to survey – Live News | politics

Theresa May should hold her first PMQs since the Easter break today. Before the break, she told MEPs that they should use the holiday...

SpaceX does not admit that his crew capsule has exploded

Explosive situationSometimes, when you fill a small metal capsule with rocket fuel, it explodes,This seems to have happened last weekend when SpaceX tried a...

CDC says Delaware has confirmed the bloodsucking kissing bug

Officials confirm that the Kissing Bug made it to Delaware. According to the CDC, a Kent County family says an...