Cisco Systems

(CSCO) - Get Report

missing an earnings target is the equivalent of

Baryshnikov

falling down a flight of stairs.

But that's just what happened Tuesday night, and it's going to smack you in the wallet whether you own tech stocks or just a plain old growth fund.

Obviously, the networking giant is a tech bellwether. Late Tuesday, the previously bulletproof San Jose, Calif.-based behemoth

reported second-quarter earnings that didn't meet analysts' expectations. The firm's inability to escape the current economic and tech spending slowdown's erosive effects will be interpreted as a bad sign for the broad tech sector.

The Cisco File

Operations

Business: Network equipment and software maker

2000 Revenue: $18.9 billion

2000 Earnings Per Share: 52 cents

2001 Estimated Earnings Growth: 49%

Stock Snapshot

52-Week Range: $31.94 - 82

Percentage Change from Jan. 1: -9.6%

Market Cap: $248.8 billion

Forward Price-to-Earnings Multiple: 42.1

Shares Outstanding: 7.2 billion

Large-Cap Growth Funds Owning Shares: 314/390

Sources: Baseline/Thomson Financial, BulldogResearch.com and Morningstar.

The news affects more than just those steely types holding Cisco -- which was down nearly 60% from its 52-week high before the announcement -- because it just might be the most widely held tech stock among big-cap growth funds.

The stock is in a whopping 81% of these funds, which are far and away the largest stock fund category and a core holding in many investors' portfolios. With more than 40% of their money pegged to the tech sector, these funds will no doubt be affected by the market's reaction to Cisco's results and confidence going forward. Given the size of funds' stake in Cisco, they'll play more than a small role in shaping that reaction.

It's easy to see why professional and amateur investors alike were smitten with Cisco. Over the past five years the company's growth-through-acquisition strategy has helped it keep growing at a fast clip, despite its more than $240 billion market capitalization. Over the past five years, the stock has averaged a 46.9% annual gain, compared with 18% for the

S&P 500

, according to

Morningstar

. That's the kind of stock that can help a growth fund manager beat his peers and the index -- which can add up to a fat bonus.

The Cisco Skid
The stock has trounced the market over the long haul, but had a disastrous run recently

Source: Morningstar. Performance figures through Feb. 5.

Despite the stock's 44.8% tumble over the last 12 months, it seems most growth managers are still hanging on to their Cisco shares. Even after three consecutive down quarters, the percentage of growth funds owning the "must own" growth stock dipped from about 85% at the start of last year to 81% at the start of this year, according to Morningstar.

Growth Centered
Despite Cisco's blue period, more than 80% of big-cap growth funds still own shares.

Source: Morningstar. Holdings as of most recent portfolio reports.

Fund managers' distaste can weigh down a stock, just as easily as their buying can boost it. As noted in an

earlier column, the percentage of growth funds owning

Microsoft

and

Lucent Technologies

dropped sharply last year. The stocks fell 63% and 80%, respectively, in 2000. While disappointed fund managers aren't solely responsible for these stocks' big losses last year, their sell orders certainly didn't help.

The three funds that own the most shares of Cisco are the

(VFINX) - Get Report

Vanguard 500 Index fund, the

(FMAGX) - Get Report

Fidelity Magellan fund and the

(JAVLX)

Janus Twenty fund. Here's a look at the 10 funds with the highest percentage of their assets invest in Cisco's shares, according to their most recent portfolio reports.

Fund Junkie runs every Monday, Wednesday and Friday, as well as occasional dispatches. Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice. Editorial Assistant Dan Bernstein contributed to this article.