Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. The company also offers switching portfolio encompasses campus switching as well as data center switching; enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure, and reliable connectivity to campus, data center and branch networks; wireless products include wireless access points and controllers; and compute portfolio including the cisco unified computing system, hyperflex, and software management capabilities, which combine computing, networking, and storage infrastructure management and virtualization. In addition, it provides Internet for the future product consists of routed optical networking, 5G, silicon, and optics solutions; collaboration products, such as meetings, collaboration devices, calling, contact center, and communication platform as a service; end-to-end security product consists of network security, cloud security, security endpoints, unified threat management, and zero trust; and optimized application experiences products including full stack observability and network assurance. Further, the company offers a range of service and support options for its customers, including technical support and advanced services and advisory services. It serves businesses of various sizes, public institutions, governments, and service providers. The company sells its products and services directly, as well as through systems integrators, service providers, other resellers, and distributors. Cisco Systems, Inc. has strategic alliances with other companies. Cisco Systems, Inc. was incorporated in 1984 and is headquartered in San Jose, California.

Cisco выглядит как зрелый, прибыльный бизнес с сильной операционной рентабельностью и устойчивым ростом прибыли, но рынок уже закладывает в цену заметно высокий уровень качества. Выручка за последние периоды последовательно растёт, а вместе с ней увеличиваются gross profit, operating income и net income, что подтверждает хорошую реализацию в операциях. Маржа валовой прибыли держится около 65%, операционная маржа поднялась до 22.75%, а чистая маржа — до 18.76%, то есть компания зарабатывает очень эффективно для своего масштаба. ROE, ROA и ROI также находятся на высоких уровнях и улучшаются по годам, что поддерживает премию к оценке. При этом P/S и P/B существенно выше медианы отрасли, что указывает на дорогую оценку по выручке и балансу, даже несмотря на сильную прибыльность. P/E и P/FCF выглядят более сдержанно, но не настолько низко, чтобы полностью компенсировать высокие мультипликаторы по продажам и капиталу. Ликвидность слабая: quick ratio и current ratio ниже отраслевых ориентиров и не демонстрируют заметного запаса прочности, поэтому это умеренный риск для консервативного инвестора. Долговая нагрузка тоже не идеальна: debt/equity выше медианы, а долгосрочный долг остаётся значимым относительно капитала, хотя баланс в целом не выглядит перегруженным. Дивидендная доходность снизилась по сравнению с более ранними периодами, что уменьшает привлекательность бумаги для доходных стратегий. Собственный капитал растёт, активы в целом стабильны, а liabilities постепенно снижаются, что смягчает долговой риск, но не отменяет его полностью. В сумме фундаментал поддерживает качественную компанию с хорошей операционной динамикой, однако высокая оценка по части мультипликаторов и неидеальная ликвидность ограничивают потенциал переоценки. Для инвестора это скорее история умеренного апсайда с премией за качество, а не случай для агрессивного повышения целевого ориентира.

Cisco Systems, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, незначительно упал. Медведи в растерянности.

Strong index, slightly down. The bears are confused.

Сильный индекс, незначительно вырос. Рынок не поддерживает быков.

Strong index, slightly up. The market does not support the bulls.

Сильный индекс, незначительно упал. Рынок на стороне медведей.

Strong index, slightly down. The market is on the bears' side.

Средний индекс, значительно упал. Отток средств из лонгов увеличился и находится на высоком уровне.

Medium index, significantly down. The outflow of funds from longs has increased and is at a high level.

Средний индекс, значительно вырос. Приток средств в шорты увеличился и находится на высоком уровне.

Medium index, significantly up. The inflow of funds into shorts has increased and is at a high level.

Сильная прибыльность и рост выручки поддерживают Cisco, но дорогие P/S и P/B, слабая ликвидность и повышенный долг требуют осторожной оценки.

Datadog’s DDOG expanding AI opportunity is increasingly tied to its ability to become a critical observability layer for AI infrastructure. GPU Monitoring strengthens that position by extending Datadog's platform deeper into one of the most expensive and performance-sensitive components of AI deployments. As enterprises and AI-native companies scale training and inference workloads, monitoring GPU utilization, efficiency, and performance is becoming essential to controlling costs and maximizing returns on AI investments.
The strategic significance lies in GPU Monitoring's integration within Datadog's broader AI observability stack. Rather than offering a standalone monitoring tool, Datadog connects GPU telemetry with application performance, infrastructure monitoring, LLM observability and workflow analytics. This unified approach is likely to increase platform adoption among AI customers while creating additional cross-sell opportunities across its expanding product portfolio. Datadog serves over 6,500 customers using one or more AI integrations, representing roughly 80% of annual recurring revenue, highlighting how AI-related workloads are becoming increasingly central to growth.
Early customer wins indicate that GPU Monitoring is already resonating with large-scale AI deployments. In the first quarter of fiscal 2026, Datadog secured significant AI-related contracts supporting some of the world's largest AI research organizations, where GPU Monitoring is helping optimize hyperscale training environments. The pace at which this demand scales beyond a concentrated set of frontier customers, however, remains a variable to watch.
The first-quarter 2026 revenues increased 32% year over year to $1.01 billion, while customers with annual recurring revenue above $100,000 grew 21% to 4,550. DDOG has raised its full-year 2026 revenue guidance to $4.30-$4.34 billion, indicating 25%-27% year-over-year growth. The Zacks Consensus Estimate for DDOG's 2026 revenues is pegged at $4.31 billion, indicating 25.71% year-over-year growth, suggesting GPU Monitoring could become an increasingly meaningful contributor to Datadog's AI revenue opportunity.
Datadog Faces Stiff Competition
Datadog faces stiff competition from Dynatrace DT and Cisco Systems CSCO in the GPU monitoring space. Cisco Systems, through its Splunk platform, offers GPU visibility as part of its AI-Ready POD infrastructure stack, while Dynatrace provides GPU and TPU telemetry within its broader AI observability suite.
However, both Cisco Systems and Dynatrace approach GPU monitoring as a bolt-on extension of existing tooling rather than a purpose-built, fleet-level solution with integrated cost attribution and cross-sell architecture at its core. Datadog's unified approach, connecting GPU telemetry directly with LLM observability and application performance monitoring, represents a structurally deeper proposition than what either Dynatrace or Cisco currently offers in this specific domain.
DDOG’s Price Performance, Valuation & Estimates
Shares of Datadog have appreciated 72.3% year to date, outperforming the Zacks Computer and Technology sector’s return of 13.2%.
DDOG Stock’s Price Performance
Image Source: Zacks Investment Research
Datadog is trading at a forward 12-month price-to-sales multiple of 17.79 compared with the broader sector’s multiple of 6.39, suggesting a stretched valuation. DDOG carries a Value Score of F.
DDOG’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DDOG’s 2026 earnings is pegged at $2.39 per share, up by 4 cents over the past 30 days, indicating a 16.59% increase from 2025’s reported figure.
Datadog, Inc. Price and Consensus
Datadog currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Datadog, Inc. (DDOG) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can GPU Monitoring Accelerate Datadog's AI Revenue Opportunity?

A month has gone by since the last earnings report for Cisco Systems (CSCO). Shares have added about 5.5% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Cisco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
CSCO Q3 Earnings Beat Estimates, Strong Networking Aids Top Line
Cisco Systems reported third-quarter fiscal 2026 non-GAAP earnings of $1.06 per share, beating the Zacks Consensus Estimate by 1.92%. The figure increased 10% year over year.
Revenues of $15.841 billion topped the consensus mark by 1.71% and grew 12% year over year. Annualized recurring revenues were $31.2 billion at the end of the reported quarter, up 2%, underscoring the continued buildout of subscription and maintenance streams.
Total subscription revenues were $7.83 billion and represented 51% of Cisco’s total revenues. Total software revenue increased 36.9% year over year to $5.6 billion.
CSCO Rides Networking Strength Across Key Platforms
Networking revenues were $8.82 million, up 25% year over year, highlighting accelerating demand for the company’s switching and routing portfolio.
That strength aligned with management’s view that customers are modernizing networks to handle AI-driven traffic growth and campus refresh cycles. Cisco pointed to record campus networking orders growing more than 25% year over year and data center switching orders up more than 40%, supported by strong uptake in wireless and campus switching.
Cisco Scales AI Infrastructure With Systems and Optics
Cisco’s hyperscaler AI infrastructure business remained a major engine of demand. AI infrastructure orders taken from hyperscalers were $1.9 billion in the quarter, helping lift the year-to-date total to $5.3 billion.
Reflecting that momentum, Cisco raised expected hyperscaler AI orders to approximately $9 billion for fiscal 2026 and lifted expected AI infrastructure revenue from hyperscalers to about $4 billion. Cisco also highlighted a balanced mix between Silicon One-based networking systems and optics, alongside multiple hyperscaler design wins during the quarter.
CSCO Sees Mixed Trends Outside Core Networking
Security revenues were $2 billion, essentially flat year over year, as gains in newer offerings continued to be weighed down by declines in prior-generation products.
Management noted progress in refreshed security products and highlighted that over 1,000 new customers purchased products such as Secure Access, XDR, Hypershield and AI Defense in the quarter, bringing net new customers since launch to roughly 5,000. At the same time, Cisco reiterated that Splunk’s transition toward cloud subscriptions from on-premise deals is creating a near-term revenue drag, even as the company targets more than 1,000 new Splunk customer logos in fiscal 2026.
Observability revenues were $269 million, up 3% year over year.
Cisco Holds Operating Discipline Amid Cost Pressures
In the third quarter of fiscal 2026, non-GAAP gross margin was 66%, down 260 basis points (bps) year over year. Non-GAAP product gross margin was 64.3%, down 330 bps, partially offset by non-GAAP services gross margin of 71.6%, up 30 bps.
In the third quarter of fiscal 2026, Cisco reported total non-GAAP operating expenses of $5.05 billion, up 4.6% year over year. As a percentage of revenues, operating expenses declined 220 bps year over year.
Cisco still delivered operating leverage, posting a non-GAAP operating margin of 34.2% on non-GAAP operating expenses of $5 billion.
CSCO’s Balance Sheet Details
As of April 25, 2026, cash and cash equivalents and investments totaled $16.64 billion, which increased from $15.8 billion as of Jan. 24, 2026. Total debt was $31.30 billion as of April 25, 2026.
The remaining performance obligations (RPO) at the end of the third quarter of fiscal 2026 were $43.5 billion, up 4% year over year. Product RPO increased 6% year over year, of which long-term RPO was $11.7 billion, up 6% year over year. Services RPO was up 2% year over year.
The company returned $2.912 billion to shareholders, including dividends of 42 cents per share and $1.252 billion in share repurchases, with $9.6 billion remaining under the repurchase authorization.
CSCO Lifts Outlook and Details Restructuring Plans
Cisco’s guidance pointed to a strong finish to fiscal 2026. For the fourth quarter of fiscal 2026, the company expects revenues of $16.7 billion to $16.9 billion and non-GAAP earnings of $1.16 to $1.18 per share.
For fiscal 2026, management raised its outlook to revenue of $62.8 billion to $63.0 billion and non-GAAP earnings of $4.27 to $4.29 per share.
Cisco also announced a restructuring plan to reallocate resources toward silicon, optics, security and AI, and expects up to $1 billion of pretax charges, including roughly $450 million in the fourth quarter of fiscal 2026, with the remainder in fiscal 2027.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 7.44% due to these changes.
VGM Scores
Currently, Cisco has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cisco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Is Cisco (CSCO) Up 5.5% Since Last Earnings Report?

After reaching an important support level, Cisco Systems (CSCO) could be a good stock pick from a technical perspective. CSCO surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend.
The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out short-term price trends and shows more trend reversal signals than longer-term moving averages.
Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
CSCO could be on the verge of another rally after moving 5.5% higher over the last four weeks. Plus, the company is currently a Zacks Rank #2 (Buy) stock.
The bullish case only gets stronger once investors take into account CSCO's positive earnings estimate revisions. There have been 9 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on CSCO for more gains in the near future.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Cisco Systems (CSCO) Recently Broke Out Above the 20-Day Moving Average

Ciena Corporation CIEN is strengthening its position in high-speed connectivity with the introduction of RLS Hyper-Rail, its next-generation intelligent line system designed to address the increasing capacity and efficiency requirements of hyperscalers and service providers. Built as a multi-rail solution and co-created with multiple hyperscalers, the platform leverages an innovative photonic design to support multiple fiber pairs in parallel over hundreds of kilometers using advanced amplification. This architecture delivers significantly higher density while improving space and power efficiency, particularly at intermediary amplifier sites where these resources are limited.
The company recently secured the industry's first multi-rail order from a leading hyperscaler, validating early demand for the RLS Hyper-Rail platform and reinforcing its position in the intelligent line systems market. Ciena is also engaged in discussions with multiple additional hyperscalers, neoscalers and service providers across domestic and international markets, with management noting that customer interest has exceeded expectations. Management highlighted that the platform enables high-intensity AI training across greater distances with enhanced amplification and density, making it a strategic technology for customers seeking to standardize on Hyper-Rail.
Management expects deployments to begin in 2027, with contracts representing hundreds of millions of dollars over multiple years. The company anticipates linear growth as adoption expands among multiple hyperscalers and service providers, particularly those involved in managed optical fiber networks (MOFN), where the technology is considered highly transformative.
Beyond AI training, Hyper-Rail is designed to support long-distance, high-density and low-latency connectivity for data center interconnections, while also addressing growing inference and agentic AI workloads. Ciena expects the platform to generate higher revenues beginning in 2027 and believes its larger revenue contribution, combined with higher margin potential than its single-rail RLS product, will support continued margin expansion as adoption accelerates.
Taking a Look at CIEN’s Competitors
Arista Networks ANET is benefiting from rising AI and cloud networking investments as enterprises and hyperscalers expand high-speed Ethernet infrastructure. The company is gaining traction in 800-gig deployments and expects broader adoption of scale-up and scale-out AI fabrics over time. The Arista 2.0 strategy continues to resonate with customers as modern networking platforms become increasingly important for AI-driven data center architectures. In March 2026, Arista announced XPO, a high-density, liquid-cooled pluggable optics solution for data centers. It delivers ultra-fast connectivity, improves energy efficiency and reduces cooling requirements, supporting modern AI, cloud and high-performance workloads. Expanding software automation, campus networking and routing capabilities are also supporting customer diversification and operational efficiency.
Cisco Systems’ CSCO partner base supports expansion in AI infrastructure and security. The company is working with NVIDIA on Cisco Secure AI Factory with NVIDIA, founded on the NVIDIA Spectrum-X Ethernet networking platform, and is including Cisco AI Defense and Cisco Hypershield in validated designs for enterprise AI factories. Cisco also offers NVIDIA RTX PRO 6000 Blackwell Server Edition GPUs with Cisco UCS C845A M8 servers, broadening its compute attach opportunities. Beyond NVIDIA, Cisco has been selected as a technology partner to HUMAIN, a new AI company in Saudi Arabia, alongside partners such as BlackRock Global Infrastructure Partners, MGX, Microsoft, NVIDIA and xAI.
CIEN Price Performance, Valuation and Estimates
Shares of CIEN have plunged 23% in the past month against the Communications - Components industry’s growth of 15.3%.
Image Source: Zacks Investment Research
CIEN trades at a forward 12-month price-to-earnings (P/E) ratio of 64.53, above the industry’s 48.34.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CIEN’s earnings for fiscal 2026 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
CIEN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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Will RLS Hyper-Rail Emerge as Ciena's Next Growth Catalyst?

Cisco Systems CSCO is focusing on AI security as companies increasingly use agentic AI systems that can work on their own, make decisions and complete tasks.
In its third-quarter fiscal 2026, Cisco announced Zero Trust Access for AI agents and revealed plans to acquire Galileo and Astrix to strengthen its AI security and observability capabilities. This extends Cisco’s security framework to AI-driven digital workers and helps ensure secure access and control. These additions are expected to expand the company’s security and observability platform with agent identity, access management and behavior-monitoring capabilities.
Cisco is also building new tools to protect the entire AI lifecycle. The company officially introduced DefenseClaw in its AI security announcement tied to RSA 2026-related security updates on March 23, 2026. DefenseClaw is an open-source solution designed to help customers safely deploy AI agents by enforcing guardrails and protecting against malicious behavior and attacks. In addition, Cisco launched new capabilities for its agentic Security Operations Center and AI observability platform, allowing organizations to identify and respond to threats faster and at greater scale.
Partnerships remain an important part of Cisco’s AI security strategy. The company expanded its Secure AI Factory collaboration with NVIDIA, giving customers a framework to deploy AI securely across infrastructure environments ranging from data centers to local sites. Cisco is also working with Project Glasswing, participating in the testing of Anthropic’s Claude Mythos Preview model and taking part in OpenAI’s Trusted Access for Cyber program.
Cisco’s security business is showing encouraging momentum. Cisco’s Security revenues were flat year over year at $2.01 billion in the third quarter of fiscal 2026. The company reported double-digit order growth in its core security portfolio and added more than 1,000 new customers for Secure Access, XDR, Hypershield and AI Defense during the quarter. As AI adoption grows, Cisco believes demand for advanced AI security solutions will continue to increase.
CSCO Faces Tough Competition in the Security Domain
Cisco is facing stiff competition from Fortinet FTNT and Okta OKTA in the security domain.
Fortinet is benefiting from the increasing adoption of AI. As organizations deploy more AI applications, cybersecurity needs are becoming more complex due to higher network traffic, larger attack surfaces and greater data security requirements. In the first quarter of 2026, AI-driven security operations billings of Fortinet rose 23% year over year, supported by a broad portfolio of AI-enabled solutions. Demand for secure networking, Unified SASE and security operations remained strong, while FortiGate products gained traction in securing AI infrastructure and data centers. Fortinet expects its FortiOS platform, custom ASIC technology and long-term AI investments to help capture future AI-driven security opportunities.
Okta reported strong momentum driven by rising demand for its expanding identity security portfolio. In the first quarter, new products contributed about 25% of bookings, with Identity Governance leading adoption, followed by growing traction in Privileged Access and other security offerings. The company emphasized that the rapid rise of AI agents is increasing the importance of identity management and boosting customer engagement and deal sizes. Although AI agent products are still in the early stages of adoption and are not yet a major revenue driver, Okta highlighted record pipeline levels and strong customer interest. The company expects AI-driven identity security to become a key long-term growth opportunity. Okta expects revenues between $3.185 billion and $3.205 billion for fiscal 2027, indicating year-over-year growth of 9-10%.
CSCO’s Share Price Performance, Valuation & Estimates
Cisco shares have gained 54.3% year to date, outperforming the broader Zacks Computer and Technology sector’s 15.9% increase.
CSCO Stock’s Price Performance
Image Source: Zacks Investment Research
The CSCO stock is trading at a premium, with a trailing 12-month price/book of 9.58X compared with the Zacks Computer Networking industry’s 9.37X. Cisco has a Value Score of F.
CSCO Stock Is Overvalued
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings is currently pegged at $1.17 per share, up 9 cents over the past 30 days. This suggests 18.1% growth from the figure reported in the year-ago quarter.
Cisco Systems, Inc. Price and Consensus
Cisco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Cisco Expands AI Agentic Security Portfolio: What's Ahead in 2026?

Datadog DDOG stock may trade at a premium valuation that gives some investors pause, but the cloud observability and security platform has built a formidable competitive moat. Its unified architecture consolidates infrastructure monitoring, application performance management, log management, security and AI observability within a single agent-based platform, eliminating the fragmented tooling stacks that continue to burden enterprise engineering teams. That differentiation is translating into performance. In the first quarter of 2026, DDOG generated revenues of $1.01 billion, up 32% year over year, with non-GAAP operating margins holding at 22%, while total ARR surpassed $4 billion for the first time.
DDOG raised its full-year 2026 revenue guidance to $4.30-$4.34 billion, representing 25–27% year-over-year growth, signaling management's confidence in sustained growth momentum.
The Zacks Consensus Estimate for DDOG's 2026 revenues is pegged at $4.31 billion, indicating 25.71% year-over-year growth. The consensus mark for earnings is pegged at $2.39 per share, indicating a 16.59% increase from the previous year.
Datadog, Inc. Price and Consensus
DDOG has delivered impressive returns for shareholders year to date, with shares surging 67.4%, outpacing the broader Zacks Computer and Technology sector's return of 15.9% as well as the Zacks Internet Software industry, which has declined 12.5%.
Among peers, Cisco Systems CSCO has advanced 54.3% over the same period, while Dynatrace DT has declined 6.3% and International Business Machines IBM has declined 8%, indicating DDOG's clear outperformance against both direct observability competitors and broader enterprise technology players.
DDOG Outperforms Sector, Industry and Peers
Image Source: Zacks Investment Research
DDOG's Consolidation Motion Points to Untapped Growth
DDOG's consolidation motion is converting into high-value enterprise wins, and the trajectory points to an opportunity still in its early stages. Customers are consistently arriving with fragmented stacks spanning legacy vendors, open-source tools and cloud-native point solutions, and consolidating onto DDOG as a single strategic platform. This motion is broadening, with 56% of customers using four or more products and 20% using eight or more, both improving meaningfully year over year. Yet of DDOG's 26 products, only five have crossed $100 million in ARR, leaving 18 in earlier lifecycle stages and representing a substantial runway for in-base expansion not yet fully realized.
Bits Assistant and the bring-your-own-cloud offering, both not yet generally available, are positioned to expand DDOG's reach into large-scale enterprise workloads that would not previously have considered a SaaS-based observability platform, effectively broadening the addressable market rather than simply competing within it. FedRAMP High certification is unlocking a federal agency pipeline where go-to-market investment and channel partnerships are already in place, and the planned UK data center adds a geographic dimension to a public sector expansion story that remains in early innings domestically and internationally.
AI Observability Adoption Still in Early Monetization
DDOG's AI observability positioning is evolving from inference-focused to encompassing the full AI development lifecycle, and the commercial implications of that shift are still being priced in. Over 6,500 customers are sending data through one or more AI integrations, representing 20% of total customers but 80% of ARR, with LLM observability spans nearly tripling quarter over quarter, and MCP server tool calls quadrupling in the same period. This acceleration suggests monetization remains in its early stages relative to the underlying adoption curve.
Hyperscale training workloads are converting into seven-figure and eight-figure annualized deals with AI research divisions of the world's largest technology companies. As training workloads become production-grade infrastructure for a growing number of enterprises, DDOG's GPU monitoring product is positioned to become a category-defining offering for a market still in the early stages of forming. Bits AI SRE Agent and Bits Assistant remain early in their adoption curves, meaning the monetization opportunity from DDOG's agentic product suite is largely ahead rather than behind.
A Premium Worth Paying as Competitive Distance Widens
DDOG trades at a premium, as suggested by its Zacks Value Score of F. On a forward 12-month price-to-sales basis, it trades at 17.3X, a significant premium to the sector median of 6.55X and the industry median of 3.71X.
Peers International Business Machines, Cisco Systems and Dynatrace trade at 3.51X, 6.99X and 4.95X, respectively. DDOG's premium is justified by a superior growth trajectory and a usage-based model that scales naturally with customer AI adoption. Its product pipeline remains largely ahead in its monetization curve. International Business Machines, Cisco Systems and Dynatrace do not offer a comparable combination of growth visibility and platform depth.
DDOG's Premium Valuation
Image Source: Zacks Investment Research
Investment Outlook
DDOG is benefiting from a platform consolidation motion that is still broadening, an AI observability adoption curve that remains ahead in its monetization cycle and a product pipeline with significant scaling potential yet to be realized. Its usage-based model scales naturally with customer AI adoption, making the premium valuation a reflection of genuine growth visibility rather than speculative excess.
DDOG currently carries a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity per the Zacks proprietary methodology. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Reasons to Buy DDOG Stock Despite 17.3X P/S Premium Valuation

Arista Networks, Inc. ANET has introduced the 7060XE7 Series, a next-generation suite of 1.6-terabit Ethernet platforms designed to support the rapidly growing demands of artificial intelligence (AI) infrastructure. The launch underscores the company's efforts to expand its presence in the fast-growing AI networking market.
Arista’s latest product lineup delivers up to 100 Tbps of switching capacity and 1.6 Tbps per port for AI training and inference workloads. The series includes the air-cooled 7060XE7-64PS and 7060XE7-64PRS rack switches, the liquid-cooled 7060XE7-64PRS-RV3-L for high-density deployments, and the 7060XE7-128PE, which offers 128 ports of 800G connectivity in a compact 4RU design, providing customers with flexible and scalable networking solutions.
The platform supports Linear Pluggable Optics, which can reduce interconnect power consumption by around 60%, lowering operating costs and improving efficiency. Powered by Broadcom’s Tomahawk 6 switching silicon, it supports both Arista’s Extensible Operating System and open network operating systems, while offering features such as load balancing, congestion management, resiliency and enhanced telemetry to ensure reliable performance in large-scale AI environments.
Backed by support from major cloud providers, including Meta, Microsoft and Oracle, the new portfolio strengthens Arista's position at the forefront of next-generation AI connectivity.
How Are Competitors Advancing in the AI Networking Market?
Arista faces competition from Cisco Systems, Inc. CSCO and NVIDIA Corporation NVDA. Cisco has expanded its networking portfolio to address the growing demand for AI and cloud infrastructure. The company has introduced advanced switches, routers and data center solutions designed to improve network performance and scalability. Cisco is investing in AI-driven technologies and strategic partnerships to strengthen its position in the evolving networking market.
NVIDIA is strengthening its networking offerings to support the increasing demand for AI infrastructure. The company provides high-speed InfiniBand and Ethernet networking solutions to improve AI training and data transfer performance. NVIDIA's networking technologies play a key role in connecting GPUs and enabling rapid data movement across large-scale AI data centers.
ANET’s Price Performance, Valuation & Estimates
Shares of Arista have gained 58.4% over the past year against the industry’s decline of 18.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, Arista trades at a forward price-to-sales ratio of 15.08, above the industry average of 3.65.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have increased 2.8% to $3.63 over the past 60 days, while the same for 2027 has also increased 4.8% to $4.39.
Image Source: Zacks Investment Research
Arista currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can Arista's Advanced Networking Platform Meet the Growing AI Demand?

Astera Labs ALAB is benefiting from the accelerating demand for AI infrastructure, which is driving robust growth across its product portfolio and positioning the company for further upside. In the first quarter of fiscal 2026, ALAB reported revenues of $308 million, up 14% sequentially and an impressive 93% year over year.
The company’s leadership in high-speed connectivity, expanding product portfolio and deep customer partnerships position it to capture a growing share of the AI infrastructure market. ALAB recently announced a major expansion of its operations in Taiwan and its Cloud-Scale Interop Lab. This expansion will speed up the deployment of rack-scale AI infrastructure.
The move improves the company’s engineering, operations, quality, and technical support. It also boosts collaboration with key partners, including AMD, Arm, Intel, NVIDIA, and leading Taiwan ODMs such as GIGABYTE, Ingrasys, Inventec, Quanta Cloud Technology, and Wiwynn. Astera Labs expects to speed up platform validation, system integration, debugging and qualification processes by strengthening its presence in Taiwan’s semiconductor ecosystem. This will help customers shorten development cycles and launch AI infrastructure solutions to market more quickly.
The company benefits from strong growth in UALink, an open-standard scale-up connectivity protocol designed to address the increasing demands of AI infrastructure. In the first quarter of 2026, ALAB collaborated with UALink Consortium to publish the new UALink 2.0 specification, introducing advanced capabilities such as In-Network Compute, confidential computing and multi-path routing while preserving its foundational memory-semantic model. These enhancements strengthen scalability, security and resiliency, further supporting an open, vendor-neutral AI compute fabric designed to meet evolving industry demands.
ALAB’s rising demand for AI reinforces its leadership in connectivity solutions, which are expected to drive growth in the second quarter of 2025. For the same quarter, ALAB expects revenues between $355 million and $365 million, implying 15% to 18% sequential growth.
ALAB Faces Stiff Competition
ALAB is facing stiff competition from other industry players like Marvell Technology MRVL and Cisco Systems CSCO. Both Marvell Technology and Cisco Systems are expanding their footprints in the AI infrastructure space.
Marvell Technology’s expanding portfolio has been noteworthy. In June 2026, Marvell Technology introduced the Teralynx T100, the industry’s first 102.4 Tbps AI-optimized switch silicon, delivering up to 25% lower power consumption and ultra-low latency to improve efficiency and scalability in large AI data center networks.
Cisco Systems has been integrating AI into its product portfolios across networking, security, collaboration and observability. Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In the third quarter of fiscal 2026, AI infrastructure orders taken from hyperscalers totaled $1.9 billion compared with $600 million in the year-ago quarter. Cisco raised its fiscal 2026 hyperscaler AI infrastructure order outlook from $5 billion to $9 billion and increased expected AI infrastructure revenues from $3 billion to $4 billion.
ALAB’s Share Price Performance, Valuation, and Estimates
ALAB shares have surged 105.4% in the year-to-date period, outperforming the broader Zacks Computer & Technology sector’s increase of 17.2%. The Zacks Internet - Software industry has decreased 11.4% in the same time frame.
ALAB Stock’s Performance
Image Source: Zacks Investment Research
ALAB stock is trading at a premium, with a forward 12-month Price/Sales of 32.5X compared with the Internet - Software industry’s 3.76X. ALAB has a Value Score of F.
ALAB’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.92 per share, which has been unchanged over the past 30 days. This suggests 58.70% year-over-year growth.
Astera Labs, Inc. Price and Consensus
ALAB’s Zacks Rank
Astera Labs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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ALAB Rides on Strong AI Infrastructure Demand: A Sign for More Upside?

Shares of Accenture plc ACN have had a decent run over the past month. The stock has risen 1.2% compared with the industry's 1.9% growth. The Zacks S&P 500 composite declined 0.8% during the said time frame.
ACN has a Growth Score of A. This style score condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s third-quarter fiscal 2026 earnings are expected to increase 6.6% year over year. Earnings for fiscal 2026 and fiscal 2027 are projected to rise 7.4% and 7.7%, respectively, year over year. Revenues are expected to increase 6.6% in fiscal 2026 and 5.3% in fiscal 2027.
Factors That Bode Well for ACN
Accenture is benefiting from robust demand for application modernization and maintenance, cloud enhancements and cybersecurity. The company reported that revenues increased 8% year over year to $18 billion during the second quarter of fiscal 2026, driven by broad-based growth across geographic regions and service offerings. The Asia Pacific region delivered the strongest growth during the said time frame, with revenues increasing 10% in local currency. Revenues from the Americas grew 3%, while Europe, the Middle East and Africa posted 2% growth.
Accenture PLC Revenue (TTM)
The worldwide artificial intelligence (AI) boom also drives growth opportunities for ACN. The management highlighted growing demand from clients seeking to integrate advanced AI capabilities into core business processes. The company is employing more than 85,000 AI and data professionals, exceeding its fiscal 2026 target ahead of schedule. ACN reported that more than 100 additional clients initiated advanced AI engagements during the last reported quarter, creating a significant growth opportunity.
Accenture pursues acquisitions, partnerships and strategic investments as key drivers for long-term growth. It invested $1.6 billion in acquisitions during the second quarter of fiscal 2026 and expects to deploy approximately $5 billion toward acquisitions during fiscal 2026. The company recently acquired Faculty, a U.K.-based AI-native services company with a decision-intelligence platform and a majority stake in DLB Associates, a fast-growing data center engineering and consulting firm.
ACN expanded its relationship with Palantir, a data analytics platform provider, through the acquisition of Decho and RANGR Data. Decho is a U.K.-based technology and AI consultancy that helps organizations reinvent through the design, delivery and scaling of Palantir solutions. RANGR Data is a U.S.-based certified Palantir partner with deep experience in driving scaled transformation through a client-centric approach.
The company has a consistent track record of dividend payments. It paid dividends of $3.7 billion, $3.2 billion, $2.8 billion and $2.5 billion in fiscal 2025, 2024, 2023 and 2022, respectively. Such moves indicate its commitment to returning value to shareholders and underline its confidence in business.
Key Risks to Watch
ACN faces stiff competition from strong companies such as Genpact Limited, Cognizant Technology Solutions and Infosys. This tough competition, along with the limited scope for product differentiation, makes renegotiating large contracts increasingly important and creates pricing pressure on ACN.
ACN is witnessing growing cost pressures as operating expenses continue to rise. Total operating costs increased 5.9% in fiscal 2023, remained elevated in fiscal 2024 despite being flat and rose another 7.5% in fiscal 2025, highlighting persistent cost intensity. This trend underscores the need for tighter cost controls to prevent expenses from outpacing revenue growth and eroding profitability. Total operating expenses climbed a further 7.9% year over year in the second quarter of fiscal 2026, reinforcing near-term margin concerns.
Accenture currently carries a Zacks Rank of #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
A couple of better-ranked stocks in the broader Zacks Computer and Technology sector are Cisco Systems CSCO and Dell Technologies DELL.
Cisco Systems carries a Zacks Rank #2 (Buy) at present. It has a long-term (next five years) earnings growth expectation of 11.1%.
CSCO delivered a trailing four-quarter earnings surprise of 2%, on average.
Dell Technologies sports a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 26.4%.
DELL surpassed the Zacks Consensus Estimate in each of the trailing four reported quarters, with an average earnings surprise of 18.7%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Here's Why You Should Retain Accenture Stock in Your Portfolio Now

Ciena Corporation CIEN stock has declined approximately 13% since its second-quarter fiscal 2026 results were reported on June 4, 2026.
Shares of the company have declined 19.7% in the past month, underperforming the Zacks Computer & Technology sector and the Zacks Communication - Components industry, which decreased 0.2% and 14.9%, respectively. The S&P 500 composite is down 0.6% over the same time frame. The company’s shares have surged 38.4% in the past three months.
CIEN has outperformed its peers, Corning Incorporated GLW and Arista Networks, Inc. ANET but underperformed Cisco Systems, Inc. CSCO. GLW and ANET have climbed 37.9% and 12%, respectively, while CSCO has gained 60.7% in the past three months.
Image Source: Zacks Investment Research
Investors may wonder whether CIEN has further downside risk or if its underlying fundamentals can help stabilize the stock. Let’s examine the company’s strengths, operational challenges and growth outlook to determine the best course of action.
CIEN’s Q2 Earnings Snapshot
Ciena reported fiscal second-quarter 2026 adjusted earnings of $1.64 per share, surpassing the Zacks Consensus Estimate of $1.46. The bottom line soared 290% year over year, driven by accelerating AI-led network investments.
Quarterly revenues increased 39.5% from the year-ago quarter to $1.57 billion, topping the consensus estimate of $1.50 billion, supported by record sales, robust cloud demand and strong adoption of optical networking solutions.
Management expects fiscal third-quarter 2026 revenues of $1.625 billion (+/-$50 million). The company also raised its fiscal 2026 revenue guidance to $6.3 billion (+/-$100 million), implying approximately 32% year-over-year growth at the midpoint. Management attributed the improved outlook to continued AI infrastructure investments and sustained demand for its optical networking solutions.
Image Source: Zacks Investment Research
Key Factors to Consider
Ciena is benefiting from AI-led demand across cloud and service providers, its technology leadership, deep customer relationships and a broad portfolio spanning systems, interconnects, software and services. The company’s revenues grew in the second quarter, its adjusted gross margin expanded and adjusted earnings per share nearly quadrupled. Management stated that a strong and growing backlog, together with its leading technology portfolio, provides strong visibility and positions the company to capture long-term opportunities across WAN and data center networking.
The company is also gaining momentum from increasing investments by hyperscalers and service providers in network infrastructure. The company noted that all customers are prioritizing high-capacity, low-latency and high-speed connectivity to support AI model training, data ingestion and inference. Its addressable market is expected to nearly double to around $50 billion by 2029, supported by growth in both traditional WAN markets and high-growth data center opportunities. Service provider revenues increased 28% year over year, while India service provider revenues more than doubled, reflecting strong managed optical fiber network deployments.
Ciena continues to benefit from demand for its latest networking solutions and expanding customer engagements. Ciena announced the industry's first multi-rail order for its RLS Hyper-Rail platform from a leading hyperscaler and is engaged in discussions with multiple additional hyperscalers, neoscalers and service providers. Its DCOM solution contributed to 88% year-over-year growth in the Routing and Switching segment, while initial orders from a second hyperscaler and lab qualifications with a third customer further expanded its customer base. The company also secured a new hyperscaler win for its coherent modules and remains on track to more than double pluggable revenues compared with 2025.
Ciena is further advancing from customer co-creation initiatives and operational execution. Management stated that customers involve the company early in developing new architectures, helping improve road map decisions, increase win rates and provide greater demand visibility. In the second quarter of fiscal 2026, the company achieved free cash flow of $219 million and a cash balance of $1.4 billion, while adjusted gross margin improved through engineering cost reductions, product mix and pricing optimization. Backlog increased by more than $600 million sequentially to $7.7 billion, supported by strong order flows and customer collaboration, providing visibility into 2027.
However, Ciena continues to operate in a supply-constrained environment where demand is exceeding available supply, prompting the company to invest additional capital and operating expenses to secure future manufacturing capacity and supply security. Management also noted ongoing constraints in modem components and laser pumps used in amplifiers and line systems, while inflationary pressures and higher variable compensation tied to stronger performance are increasing operating expenses, leading the company to make additional investments to support future demand.
CIEN’s Valuation
CIEN trades at a forward 12-month price-to-earnings (P/E) of 67.87X, above the industry’s 50.96X. CSCO, GLW and ANET trade at a forward 12-month P/E of 32.09X, 51.75X and 43.8X, respectively.
Image Source: Zacks Investment Research
CIEN’s Upward Estimates
The Zacks Consensus Estimate for CIEN’s earnings for fiscal 2026 has been revised marginally upward over the past 30 days.
Image Source: Zacks Investment Research
What Should You Do With CIEN Stock Now?
Despite the recent pullback and a premium valuation, Ciena’s strong AI-driven demand, expanding backlog, improving profitability, raised fiscal 2026 outlook and growing opportunities across cloud and optical networking support its long-term prospects.
Existing investors should hold the stock, while new investors may wait for a better entry point before initiating a position.
CIEN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.