Cisco & Cerebras Orders up, Stocks Down

August 13, 2026

AI Summary

5 min read

Cisco reported a solid quarter with accelerating revenue and even faster earnings growth, yet shares fell 7.4%. Cerebras Systems, the AI chip startup that recently went public, saw its stock drop 13% after a confusing earnings report that missed GAAP revenue estimates. The episode also featured a lightning round of three under-the-radar companies: Xometry, Marqeta, and BBB Foods. The dominant theme was that strong earnings beats are no longer enough to satisfy markets, especially in the AI trade, where expectations have become extraordinarily high.

Cisco: A Beat That Wasn't Enough

Cisco has now beaten earnings estimates for five consecutive quarters, and even a beat-and-raise quarter failed to impress the market. The company generated $9.3 billion in AI orders, beating its own revised guidance of $9 billion. But as Matt Frankel noted, that beat was less impressive than earlier quarters when Cisco raised its original $5 billion AI order target by nearly doubling it. "Maybe the market's starting to think that the growth is appropriately priced in," he said.

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What you'll learn

1 (00:58) **Cisco Earnings: AI Orders Up, Stock Down** - Discussing Cisco's Q4 earnings beat and 7.4% stock decline despite strong AI order growth.
2 (02:54) **Hidden Gem: Cisco's Profit Growth Outpacing Revenue** - John highlights that earnings per share grew 31% vs. 12% revenue growth, a sign of strong profitability.
3 (04:11) **Why the Stock Dropped: RPO Growth Raises Competitive Concerns** - Tyler notes that remaining performance obligations (RPOs) grew only 7%, which is light compared to peers like Arista.
4 (06:26) **Hidden Gem Analogy: Dell's AI Transformation as a Precedent** - John compares Cisco to Dell, which was a legacy business that became an AI powerhouse, leading to an 800% stock gain over three years.
5 (11:23) **Cerebras Systems Earnings: Confusing Accounting and a 13% Stock Drop** - The newly public AI chip company reported earnings that missed estimates, with a complex revenue structure causing investor confusion.
6 (13:46) **Cerebras Bull Case: Massive Backlog and Tripling Revenue** - Despite the bad day, Cerebras has a $25B backlog, $9B in cash, and management says revenue will triple year-over-year in 2027.
7 (16:42) **Cerebras vs. Nvidia: Specialization vs. Generalization** - The hosts debate whether Cerebras' efficiency gains will hurt Nvidia or simply expand the overall AI market.

+ Full timestamped outline available in the app

Guests on this episode

Matt Frankel

Show Notes

Both Cisco Systems and Cerebras earnings reports showed two companies with bulging order books, but even that couldn’t satiate the markets appetite. Jon, Matt, and Tyler break down their respective earnings reports and look at some of the major challenges these companies will face and the challenges they present to investors. Plus, a lightning round of earnings reports on our favorite under-the-radar stocks.
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Tyler Crowe, Matt Frankel, and Jon Quast discuss:

Cisco earnings. Strong hardware, weak software
Cerebras, making sense of its confusing earnings
Can innovations like Cerebras threaten the AI incumbants?
Hidden Gems earnings lightning round

Companies discussed: CSCO, ANET, DELL, CRBS, NVDA, XMTR, MQ, TBBB
Host: Tyler Crowe
Guests: Matt Frankel, Jon Quast
Engineer: Bart Shannon

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