“The purchase price is equivalent to about 13% of Cisco’s market cap, a big number for a company that has historically avoided blockbuster deals.”
Cisco’s previous biggest deal was $6.9 billion for a set-top box maker in 2006. Now it pays $28 billion in cash and debt for Splunk, whose cloud pivot an Oppenheimer analyst on the call called “underwhelming.” Cisco stock is up 10% in five years against 66% for the Nasdaq. The public cloud keeps eating Cisco’s back-end business, so Chuck Robbins said “AI-enabled” and bought $4 billion in recurring revenue.