Cisco lifts guidance on AI-driven demand, Q1 revenue beats estimates

South Africa

South African equities strengthened, with the Top 40 rising 1.57% to 105,472.9 points and the All Share gaining 1.55% to 112,908.5 points, supported by improved sentiment following the country’s first inflation-target adjustment in 25 years. The shift to a 3% target, with a 1-percentage-point tolerance band, aims to anchor expectations and gradually create scope for lower rates. Implementation over two years provides SARB flexibility as businesses and unions adapt. Ramaphosa announced cabinet appointments involving DA partners, while Vodacom signed a landmark Starlink deal to expand high-speed broadband across Africa.

Europe

European equities posted a second record close, with the STOXX 600 up 0.7%, driven by banks after ABN Amro reported strong results and acquired NIBC Bank. Financials continued to outperform on resilient earnings, with Spanish and Italian markets leading gains this year. Investor sentiment improved on expectations of an end to the U.S. government shutdown. Meanwhile, ECB President Christine Lagarde will succeed Jerome Powell as chair of two major BIS committees, reinforcing Europe’s influence in global monetary coordination as policymakers navigate moderating economic momentum.

United States

U.S. markets ended mixed, with the Dow setting another record as investors rotated from high-valuation tech into financials and defensive names ahead of the expected end to the government shutdown. Goldman Sachs and UnitedHealth each rose around 3.5%, lifting the index, which is up 13% in 2025 but still trails the S&P 500’s 17% gain. Market positioning reflected shifting risk appetite as investors weighed short-term disruptions to economic data releases against improving fiscal clarity and potential implications for the Federal Reserve’s near-term policy trajectory.

Asia

Asia-Pacific stocks rose after the U.S. passed a funding bill, easing global risk concerns. In Japan, BoJ Governor Ueda reiterated the need for inflation supported by wage growth, echoing PM Takaichi’s pro-growth stance. Policymakers stressed it was premature to tighten policy, though wholesale inflation exceeded expectations on persistent food costs. Analysts expect price pressures to ease but warned that renewed yen weakness could raise import prices, complicating the BoJ’s gradual normalisation path. Market sentiment remained broadly constructive despite ongoing uncertainty around inflation dynamics and monetary timing.

Currencies

The rand strengthened after South Africa announced its lower inflation target, reinforcing positive momentum in local assets. The yen fell to a record low against the euro and hovered near multi-month lows versus the dollar as Japan’s new leadership urged caution on rate hikes. The Australian dollar firmed after labour data showed a sharper-than-expected drop in unemployment, reducing expectations for further easing. Markets may face volatility as the end of the U.S. shutdown triggers delayed data releases, though key figures for October may still be omitted.

Commodities

Oil prices extended losses after U.S. crude inventories rose 1.3 million barrels and OPEC forecast a 2026 supply surplus, deepening concerns of oversupply. API data, record U.S. output expectations and expanding global inventories added to the bearish tone. Analysts noted that OPEC’s signal of excess supply released pent-up selling pressure, with sentiment deteriorating further on expectations of continued production growth. Gold gained 2% as declining U.S. Treasury yields and progress toward reopening the U.S. government boosted prospects for resumed data releases and a December Fed rate cut.

Harmony Gold Mining Company (HAR) +3.13%

Harmony delivered a strong Q1FY26, supported by robust cash generation, disciplined cost control and a favourable gold price environment. Despite an 8% planned decline in gold output and lower underground grades, production remained on track for full-year guidance, with Mponeng continuing to perform well. Hidden Valley delivered exceptional free cash flow, while group AISC rose 15% but stayed below guidance. The acquisition of MAC Copper added immediate copper exposure, and safety performance improved with a loss-of-life-free quarter. Revenue rose 20% on a 34% higher realised gold price, reinforcing a strengthened balance sheet and enhanced liquidity.

Woolworths Holdings (WHL) +8.71%

Woolworths delivered resilient 19-week trading despite muted consumer conditions in South Africa and Australia, with Group turnover and concession sales rising 6.2% (6.8% constant currency). Woolworths SA achieved strong Food growth of 7.7% and solid FBH growth of 6.2%, underpinned by improved product availability, market share gains and expanding digital channels. Woolies Dash surged 24.2% and online penetration continued to rise across categories. CRG posted 3.3% growth as brand repositioning gained traction. The share buyback progressed with 6.9 million shares repurchased, while financial services remained disciplined, supporting a stable credit book and sector-leading impairment metrics.

RFG Holdings (RFG) +4.12%

RFG expects full-year earnings per share to decline 19–24% as sustained input-cost pressure, softer canned meat volumes and constrained consumer demand weighed on regional segment profitability, resulting in a R105 million impairment. International operations delivered a stronger second half; however, full-year revenue was impacted by weaker global demand, excess deciduous fruit supply, margin pressure and a firmer Rand. Headline earnings per share are projected to be 8–13% lower, with the impairment excluded. The group will release its annual results on 19 November 2025, with management maintaining focus on cost discipline and recovery across both segments.

Universal Partners (UPL) 0.00%

Universal Partners reported a softer Q1, with NAV per share declining to GBP 1.172 from GBP 1.282 in the prior comparable quarter, reflecting portfolio valuation movements and market conditions. The Company recorded a quarterly loss of GBP 330,553, narrowing from GBP 707,278 a year earlier, while loss and headline loss per share both improved to 0.453 pence. UPL maintains its primary listing on the SEM and secondary listing on the JSE, with management continuing to focus on disciplined capital allocation and long-term value creation across its private equity portfolio.

Emira Property Fund (EMI) +1.30%

Emira delivered steady interim results for the six months to 30 September 2025, supported by its diversified South African and offshore property portfolio. Distributable earnings eased slightly to R324.5 million from R332.5 million, though the share base reduced following ongoing buybacks, enhancing per-share metrics. The Fund continued to deploy capital strategically, acquiring a 6.4% stake in SA Corporate Real Estate and maintaining exposure to US grocery-anchored centres and Polish logistics and mixed-use assets. The Board declared a 64.40 cents interim dividend, up 3.2% year on year, reflecting stable cash generation and disciplined balance-sheet management across market cycles.

Cisco Systems Inc. (CSCO) +3.14%

Cisco raised its full-year revenue and profit guidance as accelerating AI-related data-centre investment drives stronger-than-expected demand for high-performance networking equipment. The group secured more than US$2 billion in AI orders in FY25 and expects US$3 billion in AI infrastructure revenue from hyperscalers in FY26, supported by a growing multi-sector pipeline. Fiscal 2026 revenue is now forecast at US$60.2–61 billion, with adjusted EPS of US$4.08–4.14. Q1 revenue of US$14.88 billion exceeded estimates, while new product launches, including the Cisco Unified Edge platform, position the company to capitalise on sustained AI-driven capex from major cloud providers.

Chevron Corporation (CVX) -1.87%

Chevron outlined an ambitious long-term plan, targeting over 10% annual growth in free cash flow and EPS through 2030, supported by 2–3% yearly production increases and efficiencies unlocked from its recent restructuring and the US$55 billion Hess acquisition. Capex guidance was lowered to US$18–21 billion per year, while planned cost reductions were raised to US$3–4 billion by end-2026. Management highlighted robust resilience at Brent US$70 and the ability to fund dividends and capex even at US$50. Chevron is expanding exploration activity, advancing its first natural-gas-powered AI data-centre project, and preparing for potential LNG oversupply in coming years.

Advanced Micro Devices Inc. (AMD) +9.00%

AMD shares jumped 9% after the company set a bold target of US$100 billion in annual data-centre revenue, aiming to significantly expand its position in the fast-growing AI infrastructure market. At its first analyst day in three years, management outlined three- to five-year goals including tripling earnings, 35% annual group growth and 60% annual growth in data-centre sales. CEO Lisa Su sees the data-centre chip market reaching US$1 trillion by 2030, supported by partnerships with OpenAI and Oracle and the rollout of MI400 accelerators and the Helios system. Analysts view the targets as ambitious but strategically credible.

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