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Cisco's AI Hopes Dimmed by Weak Profit Forecast
12 Feb
Summary
- Cisco's forecast overshadowed by AI gains, shares fell 4%.
- McDonald's US sales grew 6.8% due to value meals resonating.
- Zillow shares dropped 18% on missed earnings forecast.
Cisco's shares experienced a notable decline of approximately 4% in late trading. This drop occurred despite the company's significant investments in new AI-focused products and a generally positive outlook. The networking equipment giant's stock had previously gained 30% last year. The company is also navigating industry-wide memory-chip shortages that are increasing costs.
Meanwhile, McDonald's reported a strong performance, with US sales from established restaurants surging 6.8% in the fourth quarter. This marks the fastest growth in over two years, attributed to the continued appeal of value meals among cost-conscious consumers. The company's international divisions also reported strong comparable sales, and its shares rose 2% in extended trading.
Zillow faced a significant downturn, with its shares tumbling as much as 18%. This sharp decline followed a first-quarter adjusted Ebitda forecast that failed to meet average analyst expectations. The home-search company is contending with increased legal costs and expenses related to its partnership with Redfin.
