Cisco, Banks and AI Stocks Drive Busy Friday Tape

December 20, 2025 at 07:16 UTC

7 min read

Stock market chart showing Cisco, banks, AI and chip stocks rising, T-Mobile declining

Key Points

Cisco rallies on AI networking optimism even as a critical email-security zero-day draws regulatory scrutiny
Big U.S. banks hit or approach 52-week highs on heavy ‘triple witching’ volume and improving fee-income stories
AI-linked chip and storage names surge, with AMD jumping over 6% and Western Digital and Seagate set to join the Nasdaq-100
T-Mobile slips on a sharp Citigroup target cut as options data point to elevated volatility ahead of a key 2026 investor day

Market backdrop: tech and financials lead into a heavy expiry

U.S. equities finished higher on Friday, December 19, 2025, with technology and AI-linked names helping lift the Nasdaq about 1.3% and the S&P 500 roughly 0.9%. The Dow added around 0.4%. Trading was shaped by the year’s final “triple/quadruple witching” expiration, which Reuters and other outlets said drove unusually high volumes as stock and index options and futures rolled or expired. That mechanical backdrop amplified moves in large, liquid stocks across sectors, particularly in mega-cap tech and big banks. Several names closed near 52-week highs or multi-decade milestones, while after-hours trading was generally calm, reflecting limited incremental company-specific news once the regular session ended. With U.S. markets closed over the weekend and an early close scheduled for December 24 ahead of the Christmas holiday, investors are preparing for thinner liquidity and potentially sharper moves on modest news when trading resumes on Monday, December 22.

Cisco: AI networking momentum meets a serious security vulnerability

Cisco Systems shares rose about 1.9% to $78.42 on Friday, trading between roughly $76.79 and $79.17 on volume of about 84 million shares, far above normal levels. The stock has recently broken above its dot-com-era peak near $80 and is being reframed in research as an AI infrastructure beneficiary, with demand tied to high‑margin networking and optical spending for AI data centers and a campus networking refresh cycle. Multiple banks, including Morgan Stanley, UBS, KeyBanc and others, have raised price targets into the mid‑$80s to low‑$90s and reiterated Buy or Overweight ratings, while MarketBeat data show a consensus target around $84.55 and a “Moderate Buy” stance. At the same time, Cisco faces a high‑severity security issue. The company disclosed an actively exploited zero‑day (CVE‑2025‑20393) in Cisco AsyncOS for Secure Email Gateway and Secure Email and Web Manager, allowing attackers to execute commands with root privileges on appliances where Spam Quarantine is enabled and exposed to the internet. Cisco Talos attributed the campaign to a Chinese‑nexus actor and noted persistence mechanisms, while Censys and TechCrunch reported hundreds of potentially exposed systems and no patch yet available, prompting mitigations and a listing in CISA’s Known Exploited Vulnerabilities catalog with a December 24 remediation due date for U.S. agencies. Separately, SEC filings showed director Michael Capellas selling tens of thousands of shares around $77, and another director, Kristina Johnson, also selling stock, transactions that come as the share price trades near record highs.

Big banks: Citi, Bank of America and Wells Fargo ride risk-on flows

Large U.S. banks participated in Friday’s risk-on session. Citigroup gained 1.8% to $114.86, setting a new 52‑week high and extending a three‑day winning streak, with volume surging to about 33.6 million shares versus a 12.8 million 50‑day average. The move followed regulatory developments that investors view as reducing overhang: the Office of the Comptroller of the Currency terminated a 2024 amendment to Citi’s 2020 consent order, and Reuters reported the Federal Reserve closed three confidential notices related to trading risk management. Analysts responded positively. Keefe, Bruyette & Woods reiterated an Outperform rating and $118 target, calling Citi a top pick for 2026, while Piper Sandler described the OCC step as a “small but important mile marker,” and JPMorgan recently upgraded the stock to Overweight, citing profitability improvement. Bank of America rose 1.86% to $55.27 on roughly 68.5 million shares, aided by an Oppenheimer target increase to $63 and commentary from Zacks and others highlighting recovering investment‑banking fees and consensus expectations for Q4 EPS of about $0.96 and full‑year 2025 EPS near $3.81. Additional analysis from Simply Wall St and Zacks framed BAC as trading at a forward P/E around 14–14.25, below some fair‑value estimates but above the broader U.S. banks group. Wells Fargo added 1.67% to $93.01, leaving it about 1.3% below its 52‑week high, on volume more than double its 50‑day average. Coverage emphasized growing investment‑banking momentum, post‑asset‑cap growth optionality, and a mixed outlook for net interest income and expenses. Across the group, upcoming Q4 earnings in mid‑January 2026 are seen as the next major catalysts.

AI chips and storage: AMD, Western Digital and Seagate in focus

AI‑exposed semiconductor and storage stocks were among the day’s strongest performers. Advanced Micro Devices jumped 6.15% to $213.43, trading as high as $215.18, and held most of its gain after hours. Commentaries from FXEmpire and others tied the move to an AI‑led rebound on a heavy options‑expiration day and to a Truist Securities note arguing that AI infrastructure semiconductor stocks remain inexpensive relative to growth prospects, even as Truist trimmed its AMD target slightly to $277. Reuters also reported that AMD CEO Lisa Su met China’s commerce minister in Beijing to discuss the company’s business development and cooperation in China, a headline that landed alongside separate Reuters coverage of a U.S. review that could allow Nvidia’s H200 AI chips to be shipped to China. Western Digital rose 3.47% to $181.08 and traded around $182.8 after hours as investors positioned for its addition to the Nasdaq‑100 Index effective before Monday’s open. Volume reached about 36.2 million shares, and coverage highlighted that Nasdaq‑100 membership can trigger mechanical buying from index‑tracking products. Analysts remain broadly constructive, with MarketBeat citing a “Moderate Buy” rating and an average target near $173.65 but a wide range up to $250, while recent company results showed 27% year‑over‑year revenue growth and non‑GAAP EPS of $1.78, supported by cloud and AI‑driven storage demand. Seagate gained 1.49% in the regular session to $296.36 and traded near $298.94 after hours, also ahead of its own Nasdaq‑100 inclusion on Monday. Recent analyst actions include Morgan Stanley lifting its target to $337 and Benchmark to $325, both with positive ratings, citing a strong HDD cycle and expectations, based on management commentary, that HDD gross margins could exceed 50% over the next 12 months as AI‑related data‑center demand tightens supply.

Telecom and mega-cap platforms: T-Mobile and Alphabet diverge

Telecom and platform stocks showed a more mixed picture. T-Mobile US fell 1.77% to $196.73 in the regular session on unusually heavy volume of about 17.2 million shares, more than three times its 50‑day average, before edging up modestly after hours. The decline followed a Citigroup decision to cut its TMUS price target to $220 from $268 while maintaining a Neutral rating, a move that reset near‑term upside expectations even as broader consensus remains positive. Zacks also flagged elevated implied volatility in certain TMUS options, and Benzinga noted that the stock’s P/E around 19 sits above the wireless industry average. At the same time, T-Mobile has emphasized capital returns, with board authorization for up to $14.6 billion in shareholder distributions through 2026, including buybacks and a $1.02 per share dividend payable in March 2026, and plans to pair its February 11, 2026 earnings release with a Capital Markets Day to update 2026–2027 targets. Alphabet’s Class C shares, by contrast, rose 1.60% to $308.61 and held near $309 after hours. The main driver was an expanded Google Cloud partnership with Palo Alto Networks that a source told Reuters is approaching $10 billion over several years, described as Google Cloud’s largest security services deal. The arrangement involves Palo Alto migrating parts of its business to Google Cloud and co‑developing AI‑driven cybersecurity capabilities. Alphabet also filed a lawsuit against SerpApi alleging large‑scale scraping of Google search and other products via fake queries, and Business Insider reported on an invite‑only Google Labs tool, “CC,” that uses Gemini to compile personalized morning briefings from Gmail, Calendar and Drive. MarketBeat reported that Citigroup raised its Alphabet target to $350 with a Buy rating, while other analyses highlighted growing investor focus on Alphabet’s AI, cloud and autonomous‑driving optionality ahead of an expected February 3, 2026 earnings report.

Key Takeaways

Triple-witching flows and a tech-led rebound produced outsized volume and notable price moves across AI, networking and financial stocks, even without major earnings releases.
Cisco’s investment case now hinges on balancing strong AI networking and campus-refresh demand against the reputational and operational risks from an actively exploited Secure Email zero-day.
Large U.S. banks are benefiting from easing regulatory overhangs and recovering fee income, but with shares near 52-week highs, upcoming January earnings will be critical for sustaining momentum.
AI infrastructure remains a central equity theme, with AMD, Western Digital and Seagate all trading on expectations that data-center and storage demand tied to AI will stay strong into 2026.
T-Mobile’s weaker session underscores how valuation resets and competitive concerns can weigh on telecoms despite sizable buyback and dividend plans, while Alphabet’s cloud-security deal shows how AI and security are converging in hyperscaler strategies.