Bank of America, Cisco snap consecutive trading sessions of gain

On Friday, large-cap lender Bank of America (NYSE:BAC) and technology leader Cisco Systems (NASDAQ:CSCO) (TSX:CSCO:CA) snapped extended trading sessions of gain.

BAC closed the day 0.72% lower at $47.12 ahead of the stress test results due to be out after market close today.

Notably, the Charlotte, NC-based bank had added 7.11% over the course of the last six trading days amid optimism surrounding the stress test results.

Investors expect the big banks to clear the 2025 stress tests and to be in a position to return more money to investors via share repurchases and dividends, according to Zacks Research.

A 30-50 basis points reduction in CET1 capital requirements across the banking sector is expected, and anything less is likely to be seen as a near-term disappointment, according to a research note by BofA Securities.

“We would not be surprised to see some profit-taking (and/or a rotation into regionals) on the back of these results,” said the research note.

Notably, other large banking stocks such as JPMorgan Chase and Wells Fargo show a similar pattern today.

Separately, Baird downgraded Bank of America to Neutral from Outperform, citing that risk/reward trade-off in mega-cap banks is not attractive and regionals look better on a valuation basis.

The rating differs from the average sell-side analyst rating and Seeking Alpha’s Quant rating of Strong Buy. However, it aligns with the average SA authors rating of Hold.

Meanwhile, Cisco ended the day 0.44% down at $68.65. The stock had added 5.42% over the course of the last six trading days.

The San Jose, CA-based networking stock has benefited from continued spending on artificial intelligence. CSCO hit its highest level since the dot com bust on Monday.

Last week, Deutsche Bank analyst Matt Niknam upgraded shares, citing improved visibility, AI-related tailwinds, a Campus portfolio refresh, and a better approach towards the networking and security markets.

For today, technology stocks are largely in the red as President Donald Trump said he was ending all trade discussions with Canada, effective immediately, after claiming that the country had imposed a digital services tax on U.S. technology companies.

The Wall Street community and Seeking Alpha authors continue to see Cisco as a Buy. However, Quant grades the stock as Hold.

Next week, Cisco will see the ex-dividend date for its upcoming dividend payment.