Market Summary - February 12, 2026
US Market Overview
The US stock market opened with mixed sentiments on February 12, 2026. The US100 index saw a slight decline of 0.20%, while the US30 and US500 indices experienced slight gains. Notable gainers included Howmet Aerospace, Eli Lilly, Walmart, Micron, and Exelon.
Cisco Systems Earnings Report
Cisco Systems Inc. (CSCO.US) shares fell by 10% following the release of its fiscal Q2 FY2026 earnings report. Despite reporting strong revenue growth and earnings that exceeded expectations, the company's guidance disappointed investors.
Key Financial Highlights
- Record revenue of $15.3 billion, a 10% year-over-year increase.
- Non-GAAP EPS of $1.04, surpassing consensus estimates of $1.02.
- Non-GAAP gross margin of 67.5% and operating margin of 34.6%, both exceeding guidance.
- Product orders increased by 18% year-over-year, with networking orders growing over 20%.
Networking Segment Performance
The networking segment has regained its position as a key growth driver, with a 21% year-over-year revenue increase. Management noted a multi-year refresh cycle in campus networking, enhancing demand visibility.
AI Infrastructure Orders
Cisco reported $2.1 billion in AI infrastructure orders from hyperscalers, with expectations to exceed $5 billion for FY2026. This indicates a significant shift in Cisco's AI narrative towards tangible growth.
Future Guidance
For Q3 FY2026, Cisco expects revenue between $15.4 billion and $15.6 billion, with Non-GAAP EPS between $1.02 and $1.04. For the full fiscal year, revenue is projected between $61.2 billion and $61.7 billion, with EPS between $4.13 and $4.17. The guidance includes potential impacts from tariffs based on current trade policies.
Market Reaction
Despite the strong earnings report, Cisco's stock declined post-earnings. Investors appear to be weighing broader economic concerns, including potential slowdowns and rising financing costs, against the company's performance. The market's focus on cyclicality and the sustainability of hyperscaler demand may have contributed to the stock's reaction.
Other Market Movements
In addition to Cisco, the software sector faced selling pressure, with companies like Shopify also lagging. Conversely, the defense and real estate sectors showed positive performance.