TLDR

Cisco fell 6-7% despite record revenue of $17.3 billion as margin decline worried investors

Cerebras dropped 15-17% after earnings despite 70% revenue growth year over year

The S&P 500 hit a fresh intraday record helped by softer-than-expected inflation data

Oil prices fell over 2% after a record U.S. crude inventory build of 17.4 million barrels

Bill Ackman's Pershing Square returned to Netflix as part of a major portfolio overhaul

Cisco Falls After Earnings Despite Record Revenue

Cisco reported record quarterly revenue of $17.3 billion, up 18% year over year. Demand for networking equipment used in AI data centers drove the growth, and the figures also benefited from Cisco's $28 billion acquisition of Splunk, the data-analytics platform that closed in early 2024 and broadened Cisco's recurring software revenue.

The company also issued a fiscal 2027 revenue forecast of $72.2 billion to $73.4 billion, above Wall Street expectations.

Despite the strong figures, the stock fell roughly 6-7%. Gross margin declined to 66.3% from 68.4% a year earlier, and investors were not satisfied with the margin outlook management provided.

Cisco's growing exposure to lower-margin AI hardware is boosting revenue while also putting pressure on profitability — a pattern that has surfaced across networking and semiconductor companies supplying AI infrastructure.

Cerebras Tumbles as Investors Focus on Margins

Cerebras Systems, which designs wafer-scale AI chips positioned as an alternative to Nvidia's GPUs, reported second-quarter GAAP revenue of $180.1 million, up around 70% year over year. Core revenue was $209.9 million, and the company raised full-year core revenue guidance to between $880 million and $890 million.

Even so, the stock dropped 15-17% after the report. Core gross margin was 41%, and the company's roughly $25 billion order backlog remained flat during the quarter, raising questions about the pace at which committed orders convert to recognized revenue.

The reaction to both Cisco and Cerebras points to the same message: investors in AI stocks are looking for more than revenue growth. Margins and profitability are becoming the key measures.

S&P 500 Hits Fresh Record as Inflation Cools

Broader markets moved higher on Thursday. The S&P 500 reached a fresh intraday record after July's Producer Price Index came in below expectations.

Producer prices were flat month over month, versus an expected 0.2% increase. Annual PPI inflation slowed to 4.7% from 5.5% in June. Because PPI tracks wholesale prices, it is closely watched as an early indicator of where consumer inflation may be headed.

The data eased concerns that the Federal Reserve might need to raise interest rates further. Nvidia, Microsoft, and Apple all rose on the news.

Oil Prices Fall More Than 2% on Inventory Surge

Oil prices fell sharply on Thursday. Brent crude dropped about 2.2% to around $87 per barrel, while West Texas Intermediate fell to around $81.

A surprise build in U.S. crude inventories of 17.4 million barrels drove the move. That was the largest weekly increase since January 2023 and typically signals either weaker near-term fuel consumption or ramped-up production.

OPEC also lowered its forecast for global oil demand growth in 2026, adding to the downward pressure. If oil prices continue to fall, the move could help ease broader inflation pressure across the economy.

Bill Ackman Returns to Netflix Four Years After a $400 Million Loss

Billionaire investor Bill Ackman has overhauled his Pershing Square portfolio and returned to Netflix. He disclosed six new positions, including Netflix, Visa, Mastercard, Alcon, Intercontinental Exchange, and S&P Global.

Ackman originally bought Netflix shares in early 2022 before selling them just months later at a loss of more than $400 million, after a disappointing subscriber report hit the stock hard.

His return suggests he believes the company has changed. Netflix launched its ad-supported tier in late 2022 and has since secured streaming rights for live events including NFL games and WWE programming, diversifying its revenue beyond subscriptions.

The move marks one of the largest portfolio overhauls Pershing Square has made in years.

The post Today's Top Stories: Cisco, Cerebras, S&P 500 Record and Bill Ackman's Netflix Return appeared first on CoinCentral.