Top Weekly Picks: Buy Cisco, Sell Moderna

• Key U.S. economic data—including the jobs report, CPI inflation, retail sales—and another round of corporate earnings will be in focus this week.
• Cisco is expected to post strong earnings along with upbeat guidance, positioning the stock as a high-conviction potential outperformer in the near term.
• By contrast, Moderna faces pressure from declining revenue and anticipated losses, leaving the stock vulnerable to downside risk this week.

Wall Street stocks surged on Friday, posting their strongest gains in months as the Dow Jones Industrial Average finished above the landmark 50,000 level for the first time.

The rally came after three consecutive sessions of declines driven by artificial intelligence-related concerns, with software stocks particularly pressured on fears that AI could intensify competition across the sector.

For the week, the benchmark S&P 500 and the tech-heavy Nasdaq Composite edged lower by 0.1% and 1.8%, respectively, while the 30-stock Dow Jones Industrial Average gained 2.5% and the small-cap Russell 2000 advanced 1.8%.

Volatility may remain elevated in the days ahead as investors weigh the outlook for economic growth, inflation, interest rates, and corporate earnings.

On the economic front, delayed December retail sales data is set for release on Tuesday. However, Wednesday’s postponed January U.S. jobs report could prove more influential amid mounting concerns over labor-market conditions. January CPI inflation data due on Friday will also be closely watched for further evidence on whether price pressures are truly easing.

Earnings season also rolls on, with a busy slate of high-profile results due in the coming days. Notable reports include Coca-Cola, McDonald’s, Ford, Cisco, Robinhood, Coinbase, and Arista Networks, alongside key software names such as AppLovin, Shopify, and Datadog.

Regardless of broader market direction, below I highlight one stock that is likely to attract buying interest and another that could face renewed downside pressure. Note that this view is strictly short term, covering the week ahead from Monday, February 9 through Friday, February 13.

Stock To Buy: Cisco 

Cisco’s upcoming earnings report is the key catalyst for the stock this week, with the risk–reward profile appearing skewed to the upside. CSCO is set to report fiscal second-quarter results after the market closes on Wednesday at 4:05 p.m. ET.

Market expectations remain relatively modest, suggesting that even a small beat on revenue and earnings per share, coupled with steady or slightly optimistic guidance, could be enough to spark a post-earnings rally.

Analyst sentiment has been notably constructive heading into the release. According to InvestingPro data, 14 of the last 16 EPS revisions have been upward, underscoring growing confidence in Cisco’s ongoing expansion.

As a leading player in networking hardware, cybersecurity, and an increasingly important provider of AI infrastructure, Cisco is well positioned to capitalize on multiple tailwinds that could support a strong quarterly performance despite a mixed macroeconomic backdrop.

Consensus forecasts call for adjusted earnings per share of $1.02, representing a 9% increase from a year earlier. Revenue is expected to rise 8% year over year to $15.1 billion, supported by AI-driven demand and solid product sales.

Analysts see potential for longer-term upside from Cisco’s partnership with Nvidia to develop AI networking solutions for the enterprise market. Meanwhile, Cisco’s security segment underperformed in fiscal first quarter results despite the acquisition of Splunk, and investors will be watching closely for signs of a rebound in that business.

Cisco’s shares have been on a strong run, notching a string of fresh 52-week highs in recent sessions. The stock closed at $84.82 on Friday, underscoring solid momentum heading into the earnings release.

Valuation and sentiment also remain supportive. Cisco continues to trade at a reasonable earnings multiple relative to both the broader technology sector and its own historical averages, while offering an appealing dividend yield underpinned by robust free cash flow.

Trade setup:

• Entry: Near current levels (~$84–85)
• Target: $90–$95 (potential upside of ~5.8%–10.8%)
• Stop-loss: $80 (downside risk of ~5.8%)

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Stock To Sell: Moderna

Moderna, meanwhile, faces a tougher setup this week as it heads into its fourth-quarter earnings release scheduled for before Friday’s opening bell at 6:35 a.m. ET. Options markets are pricing in a sharp post-earnings swing of around ±16%, underscoring the heightened risk of a downside surprise.

After its blockbuster pandemic-era success with the mRNA COVID-19 vaccine, the biotech company has struggled with the transition from reliance on a single product to a broader—yet still largely unproven—development pipeline.

Analyst sentiment has turned increasingly cautious ahead of the report, with consensus sales estimates cut by roughly 14%, reflecting growing concerns over Moderna’s near-term revenue outlook.

Consensus expectations point to a sizable loss, with earnings per share projected at around –$2.62 on revenue of $662.8 million, representing a steep year-over-year decline of more than 30% from sales of $966 million.

Moderna is grappling with slowing revenue growth and a lack of near-term catalysts to counter weakening demand, as vaccine sales continue to fade.

At the same time, the company must maintain elevated spending on research, development, and manufacturing to advance a broad pipeline spanning respiratory viruses, oncology, and other therapeutic areas. This combination is weighing on near-term profitability and increasing pressure on cash burn.

Moderna’s share price has started to lose momentum after a strong recent rally, ending Friday at $41.01. While the stock remains up 67.1% over the past three months and 21.1% in the last month, last week’s 7% decline points to waning upside traction.

In a market increasingly favoring growth and AI-linked themes, high-beta biotech stocks like Moderna are vulnerable to rotation, particularly if earnings fall short or forward guidance disappoints.

Trade setup:

• Entry: Near current levels (~$40–41)
• Target: $35 (potential gain of ~15%)
• Stop-loss: $45 (risk of ~12.5%)

Whether you’re a newer investor or an experienced trader, tools like InvestingPro can help uncover opportunities while managing risk in a challenging and fast-moving market environment.

Sources: Jesse Cohen