economy
Jim Cramer says Cisco’s post-earnings plunge is a buying opportunity. Here’s why
CNBC’s Jim Cramer said investors shouldn’t automatically sell a stock that falls on weak earnings guidance.
TL;DR
- Investors should not automatically sell stocks that decline due to conservative earnings guidance.
- Cisco's stock pullback after earnings is considered a buying opportunity by Jim Cramer.
- Conservative guidance can mask strong demand, particularly in areas like AI, security, and data-center networking.
- Companies that "underpromise and overdeliver" are valuable for spotting future winners.
- Cisco's CEO, Chuck Robbins, tends to set conservative expectations, leading to an "underpromise and overdeliver" scenario.
- A falling stock price after strong results, coupled with cautious guidance, can be a chance to buy more.