ETFs in Focus as Cisco Beats on Q4 Earnings, Offers Weak Outlook

Tech prime Cisco Systems CSCO reported robust fourth-quarter fiscal 2025 results, beating both earnings and revenue estimates. However, shares dipped about 2% in after-market hours on the company’s weak revenue and earnings forecasts. 

ETFs with the largest allocation to this networking giant are in focus now. These include iShares U.S. Telecommunications ETF IYZ, First Trust Nasdaq Cybersecurity ETF CIBR, iShares Edge MSCI USA Value Factor ETF VLUE, Pacer Data and Digital Revolution ETF TRFK and Amplify Cybersecurity ETF HACK.

Cisco’s Q4 Earnings in Focus

The company’s earnings of 99 cents per share outpaced the Zacks Consensus Estimate of 97 cents and improved 14% from the year-ago earnings. Revenues rose 8% year over year to $14.67 billion and beat the consensus mark of $14.60 billion. 

Product revenues jumped 10% to $10.9 billion, while services revenues were flat at $3.78 billion. Cisco is benefiting from strong AI momentum, which is boosting demand for the company’s networking equipment from cloud customers (see: all the Communication Services ETFs here).

For fiscal 2026, the networking giant expects revenues in the range of $59-$60 billion and earnings per share in the range of $4.00-$4.06. The Zacks Consensus Estimate is pegged at $59.18 billion for revenues and $3.79 for earnings per share. 

For the ongoing fiscal first quarter, Cisco predicts revenues in the range of $14.65-$14.85 billion and earnings in the band of 97-99 cents per share. The Zacks Consensus Estimate is pegged at $14.56 billion for revenues and 97 cents for earnings per share.

ETFs in Focus

iShares U.S. Telecommunications ETF (IYZ)

iShares U.S. Telecommunications ETF offers exposure to U.S. companies that provide telephone and Internet products, services and technologies. It follows the Russell 1000 Telecommunications RIC 22.5/45 Capped Index, holding 20 stocks in its basket. Cisco takes the top position at 19.4% of the assets. iShares U.S. Telecommunications ETF has an AUM of $511.9 million and charges 38 bps in annual fees. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Telecomm ETFs in Focus After VZ & T's Q2 Earnings Beat).

First Trust Nasdaq Cybersecurity ETF (CIBR)

First Trust Nasdaq Cybersecurity ETF follows the Nasdaq CTA Cybersecurity Index, which measures the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors. The index includes companies primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers and mobile devices to provide protection for the integrity of data and network operations. First Trust Nasdaq Cybersecurity ETF holds 32 stocks in its basket, with Cisco taking the second spot at 9%. It has accumulated $9.7 billion in its asset base and charges 59 bps in annual fees. 

iShares Edge MSCI USA Value Factor ETF (VLUE)

iShares Edge MSCI USA Value Factor ETF offers exposure to large and mid-cap U.S. stocks with lower valuations based on fundamentals and tracks the MSCI USA Enhanced Value Index. It holds 148 stocks in its basket, with Cisco occupying the top position at 7.1% of the assets. iShares Edge MSCI USA Value Factor ETF has amassed $6.7 billion in its asset base and charges 15 bps in annual fees. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.

Pacer Data and Digital Revolution ETF (TRFK)

Pacer Data and Digital Revolution ETF aims to offer investors exposure to globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 85 stocks in its basket. Cisco takes the fifth spot, accounting for 8% of the assets. Pacer Data and Digital Revolution ETF has accumulated $104.8 million in its asset base and charges 49 bps in annual fees. 

Amplify Cybersecurity ETF (HACK)

Amplify Cybersecurity ETF is the first cybersecurity ETF that invests in companies within the growing cybersecurity industry. It tracks the Nasdaq ISE Cyber Security Select Index, holding 23 securities in its basket. Cisco takes the second position with 6.6% of the assets. Amplify Cybersecurity ETF has amassed $2.2 billion in AUM and charges 60 bps in fees per year (read: Cybersecurity ETFs to Tap as Cyber Threats Grip Tech Community).

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This article originally published on Zacks Investment Research (zacks.com).

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