Valued at a market cap of $235.8 billion, San Jose, California-based Cisco Systems, Inc. (CSCO) is a global leader in Internet Protocol (IP)-based networking and communication technology solutions. The company offers various products and services, including network security, data center solutions, collaboration tools, and advanced observability, serving diverse global customers.

Companies valued at over $200 billion are generally considered “mega-cap” stocks and Cisco Systems fits this criterion perfectly. CSCO is renowned for its innovative networking solutions, particularly in routing, switching, and cybersecurity, which empower businesses to build secure, scalable, and efficient digital infrastructures.

Shares of CSCO are trading 1.1% below its 52-week high of $59.87, reached on Nov. 27. However, the technology giant has increased 17.2% over the past three months, surpassing the broader Dow Jones Industrials Average’s ($DOWI) 8.7% return over the same time frame.

Nevertheless, in the longer term, CSCO stock is up 17.3% on a YTD basis, lagging behind DOWI’s 19.2% gains. In addition, CSCO’s 22.2% gain over the past 52 weeks, compared to DOWI’s 26.8 returns over the same time frame.

Yet, CSCO has been trading above its 50-day and 200-day moving averages since August, indicating a bullish trend.

Cisco Systems has underperformed over the past year due to a decline in networking revenues, economic uncertainty leading to cautious capital expenditures, and increasing competition from smaller networking companies. 

Moreover, despite reporting better-than-expected Q1 2025 adjusted EPS of $0.91 and revenue of $13.8 billion on Nov. 13, Cisco's shares fell 2.1% the next day due to concerns over the continued decline in networking revenues, which dropped 23% year-over-year. Additionally, sluggish demand from telecommunications and cable services providers, coupled with excess inventory, dampened investor sentiment. Furthermore, a 2.6% contraction in gross margin and a 9% rise in operating expenses to $4.9 billion raised worries about profitability and cost management, leading to a 12.1% decline in operating income.

CSCO has underperformed its rival, Arista Networks, Inc. (ANET), which gained 88.3% over the past 52 weeks and 73.2% on a YTD basis. 

Despite CSCO’s underperformance relative to the broader market over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 21 analysts covering the stock, and as of writing, the stock is trading below its mean price target of $62.63.