The Persuasive Talk of CEO Chuck Robins Lifts the Share Prices of Cisco Systems, Inc. (NASDAQ:CSCO) Higher
The compelling talk of Chuck Robins, Chief Executive Officer, lifted the stock prices of Cisco Systems, Inc. (NASDAQ:CSCO) to a higher level. The stock gained 2.13% in yesterday’s trading session to close at $49.43. The company withstood the global downturn of the cloud and the unrest. The CEO said the company is resilient despite geopolitical unrest be it a Brexit or US-China trade issues, other issues worldwide. He said there is much difference in customer perceptions worldwide in the previous three months. It is an exception to the customer, who have higher exposure to the markets in China. Despite all negative sentiments, Cisco sees no shift in the spending of customers.
Kelly Kramer, Chief Financial Officer, said it is a sigh of relief as many customers worried that negative factors concerning the tech sector worldwide also affects Cisco. The stock gained over 4% after the talk of CEO. CFO said many believe that Cisco would struggle like other companies.
Sales of chip makers sluggish
The sales of chip makers to the data centers is sluggish over declined demand mainly on account of economic unrest and a slow down in spending in China. Cisco’s revenues of servers for the data centers took a beating when compared to the previous year. However, it is offset by the increase in revenues from routers and switches for the cloud market. The revenues of Cisco on account of servers increased in the Americas.
Companies with exposure to cloud struggles a lot
According to Chuck, Cisco’s exposure to the cloud market is only marginal. Hence, the slowdown in the cloud space did not affect Cisco. However, many firms including Microsoft Corporation (NASDAQ:MSFT), Alibaba Group Holding Ltd., Amazon.com, Inc., and Alphabet Inc. that have higher exposure to the cloud are still struggling.
According to Kramer, the spending on Data Center seems to slow. Cisco is shielding itself from the slowdown impact by having a customer base from small to large firms. The company is optimistic to post better than expected revenues and earnings in this quarter. The company is enjoying security businesses and new applications. It has shrugged off the negative impact on the Netgear on account of US-China Trade war.