Breakfast News: Cisco Evolves For The New AI Era

Breakfast News: Cisco Evolves For The New AI Era

May 14, 2026

| Wednesday's Markets | | --- | | S&P 500 7,444 (+0.41%) | | Nasdaq 26,402 (+1.20%) | | Dow 49,693 (-0.14%) | | Bitcoin $79,611 (-1.48%) |

Source: Image created by Jester AI.

1. Cisco Jumps on AI Transition Results

**Cisco **(CSCO +1.21%) surged 20% higher ahead of the market open as earnings detailed an upbeat outlook based on progress around restructuring the business, with CFO Mark Patterson explaining an overhaul in the product offering.

• "We have a pretty expansive silicon portfolio today actually, but we're looking to grow it": Patterson revealed the Hidden Gems recommendation will add more types of its own networking chips, along with securing more AI agents, as it pivots to products designed to serve the growing data center needs.
• "While we are reducing roles in some areas, we are making clear, strategic investments": CEO Chuck Robbins said close to 4,000 jobs would be cut as it increases the use of AI by its own employees, along with the desire to "shift investment toward the areas where demand and long-term value creation are the strongest."

2. What You Might've Missed From After-Hours Earnings

• Doximity (DOCS 0.21%) tumbled almost 20% in pre-market trading due to quarterly earnings per share dropping by 31.6% year over year (YoY), with continued profit margin pressure expected for the Stock Advisor rec by Team Rule Breakers due to ongoing investments in AI and product development.
• STAAR Surgical (STAA +0.06%) popped almost 15% ahead of the market open as results revealed a new quarterly record for net sales, driven by robust demand from China.
• Karooooo (KARO +0.82%) dropped over 4% before the opening bell with a mixed bag of earnings. The Team Hidden Gems recommendation delivered record subscription revenue but saw higher costs reduce the operating profit margin. Fool contributing analyst Matt Frankel said earlier this month "there's not a lot not to like financially" as "the average customer generates 9 times its acquisition cost and value for the company."

3. Alibaba and JD.com Get U.S. Nod for H200s

Reuters reports the U.S. has approved around 10 Chinese firms to buy Nvidia (NVDA 0.93%) H200 chips, although no deliveries have been made yet, raising the stakes as CEO Jensen Huang visits the country along with President Trump.

• Global giants included on the approved list: The companies with a green light reportedly include Alibaba (BABA 0.91%) and JD.com (JD 2.16%), highlighting the size of the potential revenue opportunity for Nvidia to capture.
• Nvidia previously controlled 95% of China's advanced chip market: The lack of immediate deals could be due to guidance from Beijing around the imports, as it could weaken the push on homegrown AI chips.

4. Thursday Earnings From Team HG Recs

• Cellebrite DI (CLBT +0.23%) reports before the market opens, with revenue expected to grow around 18% YoY due to strong demand for AI-driven investigative tools. This builds on a strong previous quarter.
• Klarna (KLAR +1.76%) should release earnings before the opening bell, after reporting its first billion-dollar revenue quarter. It's expected to post a loss, as investors focus on whether it can manage credit risks from its expanded product lineup.
• **Applied Materials **(AMAT +1.51%) reports following the market close. The company is expected to show growth in earnings thanks to AI tailwinds from chip manufacturing tools, but sales to Chinese customers remains a headwind. Last quarter showed a stable performance.
• Globant (GLOB 2.95%) delivers results after the closing bell, with the company meeting or beating revenue consensus 75% of the time in the past two years. Free cash flow surged last quarter, thanks to a strong execution on cost control.

5. Your Take

A TMF member emailed this week to say "Babcock Wilcox (BW 5.45%) has had quite a run but still seems like a young AI energy play. I've sold some but is it a long-term hold with more upside?"

Debate with friends and family, or become a member to hear what your fellow Fools are saying!