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Cisco stock falls after William Blair downgrade

Emily Bary

Cisco Systems Inc. shares are down 1.9% in premarket trading Wednesday after William Blair analyst Jason Ader cut his rating on the stock to market perform from outperform. Ader sees "signs of tightening demand across the IT infrastructure universe, which could pressure growth in Cisco's fiscal 2020, especially when compared against unusually strong demand in fiscal 2019." He also expects that software will account for a lower portion of overall revenue than it initially seems, if investors exclude hardware-integrated software. Ader cites "long-term threats from Arista's entry into the campus market" as another reason for his caution. Cisco shares have risen 32% so far this year, as the Dow Jones Industrial Average has increased 12%.