Key Takeaways
- U.S. stock futures climbed modestly on Thursday while traders anticipated wholesale inflation figures for July
- Cisco (CSCO) shares declined 6% following earnings, despite revenue and EPS beats, due to contracting gross margins
- Cerebras Systems plummeted 17-19% after significantly missing earnings projections and reporting quarterly losses
- StubHub crashed 17% as escalating operational expenses negated revenue increases tied to FIFA World Cup 2026
- Coherent declined 4.4% even after surpassing forecasts, weighed down by elevated investor expectations post-Lumentum results
Thursday’s trading session brought significant volatility as corporate earnings continued rolling in. Market participants remained focused on pending wholesale inflation metrics for July, which could influence Federal Reserve monetary policy decisions in the coming months.
Cisco (CSCO) Slides on Margin Compression Concerns
Cisco delivered fourth-quarter fiscal results showing revenue of $17.3 billion, representing an 18% year-over-year increase that surpassed analyst predictions of $16.85 billion. The networking giant’s adjusted earnings per share reached $1.22, exceeding the Street’s $1.17 expectation.
However, shares tumbled 6% as profit margins contracted compared to the year-ago period, triggering investor anxiety about profitability trends.
Cisco’s product order volume expanded 35% annually, while networking segment orders jumped 40%, marking the eighth consecutive quarter of expansion. The technology infrastructure provider projected first-quarter fiscal 2027 revenue between $18 billion and $18.2 billion, exceeding analyst consensus. Full-year fiscal 2027 revenue outlook of $72.2 billion to $73.4 billion similarly beat Wall Street forecasts.
Company executives anticipate $7.5 billion in AI-focused hyperscaler revenue during fiscal 2027, noting that hyperscaler orders more than doubled during the fourth quarter.
Cerebras and StubHub Report Quarterly Setbacks
Cerebras Systems experienced a sharp 17% to 19% stock decline following disappointing quarterly results from the artificial intelligence chip manufacturer. While revenue climbed 74.3% year-over-year to $180.1 million, it missed analyst expectations of $194 million. Adjusted earnings per share registered at -$2.98, dramatically underperforming the -$0.17 consensus estimate.
The company highlighted core gross margin improvement to 41%, while executives noted cloud-based revenue nearly quadrupled versus the prior year. Cerebras maintained its order backlog at approximately $25 billion.
Looking ahead, Cerebras provided third-quarter core revenue guidance of $214 million to $216 million, surpassing consensus projections. The company forecasts full-year 2026 core revenue between $880 million and $890 million.
StubHub shares plunged 17% following its second-quarter loss announcement. While the ticket marketplace benefited from revenue growth associated with the 2026 FIFA World Cup, rapidly increasing operating costs completely erased those revenue improvements.
Additional Market Movement Highlights
Coherent shares fell 4.4% despite delivering results that topped analyst estimates. The decline reflected inflated investor expectations following competitor Lumentum’s impressive performance earlier in the week.
JD.com declined 3.2% despite the Chinese online retailer exceeding Wall Street’s second-quarter earnings and revenue projections.
Conversely, Omeros jumped 15% following robust second-quarter performance fueled by YARTEMLEA’s launch, which delivered $32.2 million in gross revenue, representing a 190% sequential increase from the first quarter.
Fossil advanced 7% after surpassing earnings estimates and upgrading its full-year guidance. The company’s gross margin expanded nearly 490 basis points to reach 62.4%.
Virgin Galactic dropped 11% after postponing its commercial service debut to February 2027, attributing the delay to ongoing avionics and systems integration challenges.
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