Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in CSCO.

Against the backdrop of an uncertain market environment, Cisco System, Inc.’s performance has been truly outstanding. The company’s recent third-quarter financial report showed revenue of $14.1 billion, surpassing the high end of its guidance and marking an 11% year-over-year increase. Net income for the period was $2.5 billion on a generally accepted accounting principles (GAAP) basis.

Below is a chart of CSCO's Total Return (TYD), as of July 21, 2025.

Source: YCharts

The performance data quoted represents past performance. Past performance does not guarantee future results.

Cisco Systems, Inc. (Ticker: CSCO) has been one of the more steady legacy tech names in 2025, but that doesn’t mean it’s immune to fast swings. Over the past few months, the company’s push into artificial intelligence infrastructure, combined with strong demand in networking and security, has kept traders engaged.

But the next three months may be anything but calm. Key catalysts—including earnings, product adoption updates, competitive headlines, and trade deadlines—could inject volatility into the stock.

Key Short-term Catalysts to Watch

The near-term story for Cisco is being shaped by a mix of strong operational performance and a volatile macro backdrop. Here’s what traders will be watching:

Earnings Reaction & Guidance (August 14)

Cisco’s Q3 earnings were a bright spot, $14.1 billion in revenue (+11% YoY) and $2.5 billion net income on GAAP basis. AI demand, especially for secure networking solutions, was a clear tailwind.

Why it matters short-term: The August 14 Q4 earnings release could set the tone for CSCO’s direction. Traders will be watching:

• Revenue & Earnings per Share (EPS)* guidance: Can Cisco sustain double-digit growth in AI and security segments?

• Margins: Will AI investments pressure near-term profitability

• Orders: Any slowdown in large enterprise or hyperscale orders could pressure the stock.

• Upside surprise = potential fuel for CSCL. Disappointment or weak guidance = opportunity for CSCS.

Splunk Integration & AI Product Flow

Cisco’s acquisition of Splunk expanded its security and observability capabilities, pairing Cisco’s network dominance with Splunk’s analytics and AI-driven operations. Splunk integration progress will be a Q4 focus. Traders will watch for any customer adoption announcements.

New AI products like Cisco AI Canvas (generative AI UI) and Cisco AI Assistant (conversational control for IT and security operations) could grab attention if early uptake is strong. Fast adoption could mean bullish momentum. Delays or muted response may lead to pressure on near-term sentiment.

Silicon One Headlines

Cisco’s Silicon One chips aim to power hyperscale AI networking with massive throughput and lower power consumption. Any announcements of new customer wins or deployment milestones in the next quarter could give CSCO a near-term boost.

Conversely, delays or supply constraints—especially if linked to tariff developments—could weigh on the stock.

U.S.–China Tariff Deadline (August 12)

Cisco’s global footprint means it’s sensitive to trade policy. The 90-day U.S.–China tariff pause expires August 12. A resolution could ease supply-chain cost pressure. No deal could reignite trade tensions, disrupt component sourcing, or impact overseas sales.

Trade headlines will be critical to watch into mid-August.

Arista Competition

Cisco faces competitive pressure from Arista Networks, which is winning market share in AI data center networking. Arista’s AI EtherLink portfolio remains a competitive challenge. Any large contract wins by Arista could shift sentiment quickly. Q3 earnings season may bring fresh competitive headlines that move both stocks.

Trading with CSCL and CSCS

Cisco’s next three months are full of questions soon to be answered - earnings, product adoption, tariff decisions - that can drive outsized moves in either direction.

For traders who want to shift up exposure in either direction, Direxion’s Daily CSCO Bull 2X ETF (Ticker: CSCL) and Daily CSCO Bear 1X ETF (Ticker: CSCS) provide tactical ways to trade short-term moves. CSCL and CSCS seek daily investment results, before fees and expenses, of 200%, and -100%, respectively, of the performance of Cisco Systems, Inc. common stock.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with CSCO and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with CSCO and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to CSCO is impacted by CSCO’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to CSCO at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to CSCO increases on days when CSCO is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with CSCO and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to CSCO is impacted by CSCO’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to CSCO at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to CSCO increases on days when CSCO is volatile near the close of the trading day.

Cisco Systems, Inc. Investing Risk – Issuer-specific attributes may cause an investment held by the Fund to be more volatile than the market generally. Cisco Systems, Inc. faces risks associated with: impacts on operations from various avenues; supply chain disruptions; volatility of sales to service providers and cloud markets; changes in distribution; high competition; need to manage strategic alliances; complexities of inventory management; changes in supply and demand for software subscriptions; reliance on new product development; among other risks.

Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production cost.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily CSCO Bear 1X ETF, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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