ℹ️ How are these calculated?
🎯 Investment Thesis
Q2 FY2026 earnings dropped stock 10% — margin outlook hit by higher memory chip prices despite revenue beat. Now the cheapest large-cap AI networking play at 17x PE. Silicon One G300 chip still promising but margin headwinds dampen near-term narrative. Splunk adds AI observability. At $77, 12% below ATH ($88) with improved entry quality vs pre-earnings $86.
⚠️ Key Risk
Margin compression from memory chip costs dragged stock -10% on earnings day. Contagion hit Dell, HPE, Arista too. Barclays $76 was prescient — now at parity with current price. Arista eating their lunch in high-end DC switching. Silicon One needs to show revenue traction to justify re-rating.
By The Numbers
Event Impact
Silicon One G300 AI networking chip launched. Evercore upgraded to Outperform. Splunk adds AI observability.
Minor government/defense networking contracts.
Quantum-safe networking research. Security portfolio relevant.
China revenue exposure and potential sanctions risk.
$30B debt is very high. At 17x PE, less multiple compression risk than growth stocks, but debt servicing costs matter. Some international revenue benefits from weaker dollar.
Networking infrastructure for grid management and SCADA systems. Minor indirect exposure.
Significant government networking contracts. Federal IT modernization is a tailwind. DOGE reviews could impact government IT budgets but networking is essential infrastructure.
Price Targets
Upcoming Catalysts
Competitive Landscape
Company Background
Founded 1984 at Stanford. Built the internet's routing infrastructure. Now pivoting from hardware boxes to software/AI under CEO Chuck Robbins.