Analysts have praised the acquisition, with William Blair analysts stating that it aligns with Cisco's history in networking, security, and observability markets. The Wall Street Journal reported in February that Cisco had offered more than $20 billion for Splunk, a company that specializes in optimizing the analysis of large data sets.
Key takeaways:
- Cisco's stock fell by 4% following the announcement of its $28 billion acquisition of AI-powered cloud and cybersecurity firm Splunk, the largest acquisition in Cisco's history.
- Splunk, despite reporting a $278 million loss in its last fiscal year, saw its shares rise by 21% after the acquisition announcement.
- If the deal falls through, Cisco will still be liable for $1.48 billion, but analysts believe it's highly likely the acquisition will proceed.
- Despite Cisco's stock performance, analysts have praised the acquisition, calling it a strategic move that aligns with Cisco's history in networking, security, and observability markets.