Cisco Systems Inc. (NASDAQ: CSCO) qualifies as one of the largest tech bellwether stocks in the world. When it does good quarter to quarter, the entire market reacts. Sometimes, the reaction seems more like confusion over plain English spoken by company CEO John Chambers. Not this time, though.When Chambers told attendees of a Morgan Stanley conference this week that he was comfortable with Cisco's existing guidance this year (and forward), many tech stocks headed up on his words alone.
Not only did Cisco's shares regain losses from earlier in the day yesterday, but the the Morgan Stanley Technology Index closed at 528.03, up from an earlier 517.30. IBM Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ) also saw advances as the trading day closed on Tuesday. Cisco reiterated its long-term growth prospects of 12% to 17%, plus fiscal Q3 revenue growth of 10% (plus or minus 1%) -- and those kind of figures apparently just weren't good enough for some traders who generally expect the impossible in many cases.
Chambers said that Cisco will navigate through "bumps" in the U.S. economy that may last two or three more quarters, but will also remain aggressive in acquisitions. Additionally, the world's largest computer networking company will continue to add jobs, with Chambers adding "we plan to be aggressive during the slowdown ... it's a chance to gain market share." No misinterpreting his words there.
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