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By Christine Ji

Surging demand for Cisco’s AI networking equipment and a ‘multi-billion-dollar’ refresh in its legacy business sparked upbeat results and guidance

Cisco reported $1.3 billion in AI-infrastructure orders from hyperscaler customers for the first quarter.

Cisco Systems Inc. on Wednesday delivered a strong earnings beat for its October quarter, thanks to continuing artificial-intelligence demand for its products, as well as an upgrade cycle in its legacy business.

Shares of Cisco (CSCO) jumped 7.5% in after-hours trading, as the company’s outlook also topped expectations.

The latest results showed that the provider of networking equipment and services grew revenue by 8% in its fiscal first quarter, to $14.9 billion. That exceeded FactSet consensus estimates for $14.8 billion.

Cisco has taken advantage of the AI boom with its custom-designed Silicon One chips, which power the company’s advanced routers and switches. Increased demand from “Magnificent Seven” AI-infrastructure builders, neoclouds and sovereign clouds have all led to incremental AI revenue.

The company reported that its networking product orders grew at a double-digit rate for the fifth consecutive quarter, and AI infrastructure orders from hyperscaler customers totaled $1.3 billion.

Adjusted earnings for the quarter were $1 a share, beating consensus estimates of 98 cents a share and marking a 10% year-over-year increase. Cisco also returned $3.6 billion to shareholders through $2 billion in stock buybacks and $1.6 billion in dividends. The company declared a quarterly dividend of 41 cents.

“We had a solid start to fiscal 2026, and Cisco is on track to deliver our strongest year yet,” Chuck Robbins, the company’s chair and CEO, said in a statement. “The widespread demand for our technologies highlights the critical role of secure networking and the value of our portfolio as customers move quickly to unlock the potential of AI.”

For the current quarter, Cisco guided for revenue of between $15 billion and $15.2 billion, well above the $14.6 billion consensus view. For the full year, Cisco anticipates revenue between $60.2 billion and $61.0 billion, exceeding Wall Street analyst expectations of $59.6 billion.

The strong quarter could prove to be a fresh catalyst for the stock. Shares of Cisco have rallied 25% year to date, but the stock has only risen 5% since Cisco last reported on Aug. 13.

Although the company has been a beneficiary of the AI-infrastructure boom, Citi analyst Atif Malik expressed skepticism prior to the report, writing in a note last week that there are “intensifying competitive pressures in switching and routing.” Malik still rated Cisco’s stock a buy, with a price target of $80.

Meanwhile, UBS analyst David Vogt upgraded the stock to buy from neutral and increased his price target to $88 from $74 last week. Not only does Cisco face surging AI infrastructure demand, but Vogt also saw catalysts in an upcoming cycle of office network upgrades and momentum in the security business.

Vogt’s predictions were proved right on Wednesday, as Cisco reported that a “major multi-year, multi-billion-dollar campus networking refresh cycle” is under way, with all campus networking technologies seeing accelerated order growth in the first quarter.

Also read: 10 stocks that let you invest like Nvidia in the next hot AI trade

-Christine Ji

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  11-12-25 2035ET
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