CSCO vs PD: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: PD is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. CSCO and PD share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined CSCO and PD exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Cisco Systems, founded in 1984 by Stanford University computer scientists and headquartered in San Jose, California, designs, develops, and sells technologies that power, secure, and draw insights from the internet across the Americas, Europe, the Middle East, Africa, and Asia Pacific. The company generates revenue across four main product categories: Networking (switches, routers, wireless, and increasingly AI-optimized silicon and infrastructure), Security (firewall, identity, and endpoint products plus the acquired Splunk platform for observability and threat detection), Collaboration (Webex-based unified communications and video), and Observability (application performance and IT operations monitoring). Services revenue, which includes software subscriptions and technical support, accounts for a material and growing share of the overall mix, giving the company a recurring-revenue cushion alongside its hardware cycles.

Full CSCO guide

PagerDuty sells the software that wakes engineers up. When a payment system, a checkout flow or an internal API breaks, PagerDuty ingests the alert from monitoring tools, decides who is on call, escalates until a human acknowledges it, and coordinates the response through to a postmortem. Around that core it has added runbook automation (from its 2020 Rundeck purchase), an AIOps layer that groups noisy alerts into single incidents, customer service operations tooling, and more recently a set of agentic features including an autonomous site-reliability agent and automated shift management. Roughly 15,500 paying customers use it, of which about 884 spend more than ~$100,000 a year, and annual recurring revenue sits near ~$501 million.

Full PD guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• CSCO drivers: AI Networking Demand Surge; Splunk and the Security Platform Story.
• PD drivers: Margin and cash generation from a flat revenue base; A new chief executive and a go-to-market reset.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Cisco's trailing P/E has expanded materially above its 3- and 5-year historical averages, meaning the stock reflects optimistic assumptions about AI-driven growth that require sustained execution to justify. For PD, the core problem is demand, not costs: dollar-based net retention of ~98% means the existing customer base is shrinking slightly net of expansion, so new logos are doing the work of holding revenue flat.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick CSCO if you believe its drivers more; PD if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the CSCO and PD guides.

CSCO. Cisco's trailing P/E of roughly 40x sits meaningfully above its 3-year average of around 21-22x, reflecting the market's repricing of the stock as an AI infrastructure beneficiary rather than a mature hardware company. The forward P/E of approximately 25x suggests analysts expect earnings growth to close some of that gap, but execution on Splunk integration and security revenue recovery will be key. Gross margin compression, from approximately 65.6% to 63.6% GAAP year over year in the most recent quarter, is a metric worth tracking as product mix and memory costs evolve.

PD. Two numbers explain most of the debate around PD. Revenue growth under 1% with retention below 100% is what keeps the multiple near ~2x sales, while a ~23.7% non-GAAP operating margin, real free cash flow and a cash pile worth roughly half the market cap are what keeps the floor where it is. Guidance for the rest of fiscal 2027 implies more of the same, with quarterly revenue held around ~$123 million to ~$125 million and profitability doing the improving.

Headline figures (approximate, 2026-06-27): CSCO shows revenue (ttm, as of april 2026) ~$60.7 billion, revenue growth (yoy, ttm) ~9%, non-gaap eps (q3 fy2026) $1.06, gaap gross margin (q3 fy2026) ~63.6%; PD shows revenue (ttm) ~$494 million, q2 fy2027 revenue (quarter ended july 31, 2026) ~$124.4 million, up ~0.8% year over year, annual recurring revenue / net retention ~$501 million ARR, dollar-based net retention ~98%, profitability GAAP operating income ~$10.2 million (~8.2% margin); non-GAAP operating margin ~23.7%; non-GAAP diluted EPS ~$0.32.

CSCO and PD are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined CSCO and PD exposure against your real portfolio. It is not an investment adviser.