Cisco CEO Urges Improved US-China Relations for Global Economy
Davos, Switzerland - Cisco CEO Chuck Robbins emphasized the importance of amicable relations between the United States and China for the global business community. Addressing the World Economic Forum, Robbins stated, "I firmly believe that the world and global economy prosper when the US and China coexist harmoniously."
Despite ongoing challenges, Robbins expressed optimism about the Trump administration's outreach efforts. As Chairman of the Business Roundtable, he has a vested interest in fostering consensus on trade policy and advocating for businesses with the government.
Cisco's China Presence
Since its entry into the Chinese market in 1994, Cisco has established a significant presence in the region. Employing approximately 4,000 people and operating in 16 cities, the company is involved in sales, customer support, R&D, and IT sourcing.
Despite stiff competition, Cisco's product revenue in China has experienced a 35% decline in the fiscal year 2024. Robbins acknowledges that the company's China operations contribute minimally to its overall performance.
Tax Concerns
Robbins stressed the urgency of addressing expiring tax cuts for businesses and households. "It's crucial to resolve this issue this year, as the potential tax increases would be substantial for American citizens," he explained.
Market Performance and Outlook
Cisco's stock has seen a resurgence in recent months, outperforming the S&P 500. Amid the growing momentum of AI infrastructure, the company has reported better-than-expected earnings and positive integration of its acquisition of Splunk.
Analysts anticipate further gains for Cisco, supported by the recovery in enterprise networking demand and the company's role in building out AI infrastructure. JPMorgan analyst Samik Chatterjee rates Cisco shares as "Outperform."