Cisco's Expanded Partnership With Nvidia Overshadowed By The "Price" It Has To Pay For Its AI And Cybersecurity Shift
Portfolio Pulse from Upwallstreet
Cisco Systems Inc (CSCO) announced a 5% workforce reduction, approximately 4,250 jobs, as it enters 2024 alongside tech giants like Alphabet (GOOG), Amazon.com Inc (AMZN), and Microsoft Corporation (MSFT) in making job cuts. Despite expanding its AI and cybersecurity partnership with Nvidia Corporation (NVDA) to focus on data centers, Cisco's positive news was overshadowed by a modest forecast for the current quarter and full year. Cisco's fiscal second quarter saw a 6% YoY revenue decline and a cautious outlook due to macroeconomic challenges and supply chain issues. The company also plans to acquire Splunk to diversify from its networking equipment business.
February 20, 2024 | 1:30 pm
News sentiment analysis
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NEGATIVE IMPACT
Amazon.com Inc (AMZN) announced targeted job cuts across its film and television studio, Audible, and Buy With Prime divisions, aligning with industry-wide layoffs.
Amazon's job cuts, especially in its entertainment and Prime divisions, could impact investor sentiment negatively in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Cisco announced a 5% workforce reduction and a modest forecast for the current quarter and full year, overshadowing its expanded AI partnership with Nvidia.
The announcement of job cuts and a modest financial forecast could lead to negative investor sentiment in the short term, potentially impacting Cisco's stock price negatively.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
Alphabet (GOOG) also initiated job cuts, dismissing hundreds from hardware and internal software divisions, reflecting broader tech industry trends.
Job cuts at Alphabet, part of a broader trend in the tech industry, could lead to short-term negative sentiment among investors.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Microsoft Corporation (MSFT) reduced its video game staff by about 8%, less than 1% of its total workforce, after acquiring Activision Blizzard.
The job cuts in Microsoft's video game division, following a major acquisition, could lead to short-term negative sentiment among investors.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Nvidia's expanded AI deployment and management partnership with Cisco focuses on data centers, promising easy-to-deploy AI infrastructure solutions.
The expanded partnership with Cisco could be seen positively, highlighting Nvidia's growing influence in AI infrastructure solutions, potentially boosting investor confidence.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80