When a senator sells stock, people pay attention. Florida’s Marco Rubio recently sold his Cisco Systems (CSCO) shares on Jan. 7. According to his filing, his position was worth between $1,000 and $15,000. While this isn’t a huge trade compared to other politicians’ deals, the timing makes it worth looking at more closely.

Cisco isn’t just any tech company. It’s a $248 billion giant that keeps many of the world’s computer networks running. The company has built trust with investors by steadily increasing its dividends year after year. Many big investment firms and regular investors hold onto Cisco stock for this reason. So when Rubio sells his shares, it makes you wonder if he knows something other investors don’t.

But jumping to copy Rubio’s move might not be smart. Sure, watching what politicians do with their stocks can be useful, but it’s just one small piece of the puzzle. To really understand if selling Cisco makes sense, we need to look at how the company is doing, where it stands in the market, and what its future might hold. The full story might be different from what this one sale suggests.

Now, let’s examine Cisco’s business to see if Rubio’s sale points to real problems or if he’s just moving money around.

Cisco’s Financial Health Check

Every three months, Cisco (CSCO) pays its investors a nice chunk of change - $0.40 per share - adding up to a 2.57% yearly return. 

Looking at the stock price, Rubio’s timing seems odd. Cisco shares are up 2.9% in just five days, 6.9% in the past month, 6.1% since the year started, and 25% over the past year.

The company’s latest earnings report from Nov. 13, 2024, tells an interesting story. While its revenue of $13.8 billion was down 6% from last year, customer orders are up 20% year-over-year, and up 9% year-over-year excluding Splunk. The company made $0.91 per share, above the company’s guided range. 

The stock looks like a good deal. Investors are paying about 20 times forward earnings, while similar tech companies trade for 25 times earnings. 

For long-term investors, these numbers paint a different picture than what Rubio’s sale might suggest.

Cisco’s Strategic Moves

Just as Rubio sold his Cisco shares, the company has been busy growing and trying new things. On Jan. 15, 2025, Cisco launched a new product called AI Defense that helps protect companies using artificial intelligence (AI) from hackers and security problems.

Right after that, on Jan. 31, 2025, Cisco completed its acquisition of a company called SnapAttack. This Arlington, Virginia-based company specializes in detecting cyber threats. According to Cisco, this will help make Cisco’s Splunk security tools even better. 

Then on Feb. 6, 2025, Cisco teamed up with another big tech company, Hitachi Vantara. Together, they are building a new solution for Red Hat OpenShift, combining Cisco’s computer systems with Hitachi’s storage technology to help businesses run faster and use less energy. .

Cisco is clearly pushing hard to be a leader in AI, cybersecurity, and cloud computing. For everyday investors, this is another reason not to follow in Rubio’s footsteps and sell shares.

What Top Analysts Are Saying About Cisco’s Future

Analysts still like Cisco’s chances. The company will report its second-quarter results for its fiscal 2025 on Feb. 12. The company is guiding for revenue between $13.75 billion and $13.95 billion and adjusted earnings per share between $0.89 and $0.91. 

Twenty-one analysts have a consensus “Moderate Buy” rating on Cisco stock. Nine have a “Strong Buy,” two have a “Moderate Buy” and 10 have a “Hold.” 

This mix shows that analysts are hopeful about where Cisco is headed. The company is guiding for full-year revenue between $55.3 billion and $56.3 billion, and adjusted earnings per share between $3.60 and $3.66.

Perhaps most telling is the mean price target of $64.68, suggesting potential upside of 3% from the current price.

The Bottom Line

Should you follow Rubio’s lead? Probably not. 

The senator’s sale of Cisco stock might raise questions, but it doesn’t necessarily signal trouble. While congressional trading can offer interesting insights, Cisco’s solid fundamentals, strategic AI pivot, and Wall Street’s bullish outlook paint a different picture. With a healthy dividend yield, strong market position, and clear growth catalysts in AI and cloud services, Cisco remains an attractive long-term hold.