Rising demand for AI infrastructure fuels Cisco’s (CSCO) strong forecast and renewed investor optimism.
Cisco Systems has delivered an upbeat earnings report and raised its 2026 outlook, signaling that artificial intelligence infrastructure could be a major growth engine for the networking giant. Investors responded positively, sending the stock sharply higher as the company demonstrated solid execution and expanding AI momentum.
Key Points
- Quarterly revenue rose to $14.88 billion, surpassing expectations.
- AI infrastructure orders from hyperscalers reached $1.3 billion in Q1.
- Cisco raised its 2026 revenue forecast to as high as $61 billion, with earnings projected up to $4.14 per share.
Cisco’s Strong Quarter Reinforces Growth Outlook
Cisco reported adjusted earnings of $1.00 per share on revenue of $14.88 billion for its fiscal first quarter, both slightly above analyst estimates. Product revenue climbed 10% to $11.1 billion, while service revenue increased 2% to $3.8 billion.
The real story, however, lies in the company’s guidance. Cisco expects revenue between $15 billion and $15.2 billion for the current quarter, above Wall Street forecasts. For fiscal 2026, management now targets $60.2 billion to $61 billion in revenue—up about $1 billion from prior projections.
This strong performance positions Cisco among companies that are good to invest in for exposure to AI-driven growth without paying premium valuations.
How Is Cisco Benefiting From the AI Boom?
Artificial intelligence has created a surge in demand for faster, more secure networks—an area where Cisco has long dominated. The company reported $1.3 billion in AI infrastructure orders from large cloud providers, known as hyperscalers, signaling rapid adoption of its networking and optical technologies.
CEO Chuck Robbins emphasized that secure networking has become critical as enterprises move to unlock AI’s potential. The company’s updated products—including high-performance switches, routers, and pluggable optics—help power the data centers that train and deploy advanced AI models.
Cisco expects to generate about $3 billion in AI-related revenue by fiscal 2026, highlighting a strong multiyear growth cycle driven by data-center modernization.
Can Cisco Keep Its Momentum Going?
While the outlook remains positive, investors are watching closely to see if Cisco can maintain this pace as competition intensifies. Rivals such as Broadcom and Hewlett Packard Enterprise (HPE) are also chasing hyperscale customers.
However, Cisco’s established customer relationships, scale, and collaboration with Nvidia (NVDA) give it a strategic edge in the AI infrastructure race. Industrial IoT orders rose 25% year-over-year, while enterprise networking demand remains solid thanks to widespread AI adoption across industries.
For investors analyzing stocks, Cisco’s consistent earnings growth, dividend stability, and emerging AI opportunities make it a compelling candidate among the best company investments in tech infrastructure.
What It Means for Investors
Cisco’s latest results underscore how even mature tech companies can reinvent themselves around new technology trends. The company’s shift toward AI-driven networking and its expanded software offerings—such as its acquisition of Splunk—suggest a more diversified growth model going forward.
At roughly 13 times forward earnings, the stock trades well below high-flying AI peers, offering potential value for long-term investors who believe in the AI infrastructure story. The raised guidance and strong order momentum show management’s confidence in the company’s future pipeline.
For those learning the basics of investing or looking for steady exposure to AI growth, Cisco offers a balance of innovation, cash flow, and dividend reliability.
Conclusion
Cisco’s impressive quarter and upgraded outlook have reignited optimism around the company’s role in powering the AI era. With secure networking now at the heart of digital transformation, Cisco appears well-positioned to sustain growth and reward investors seeking stability in a rapidly changing tech market.
FAQs
Why did Cisco’s stock rise after earnings?
Cisco’s stock gained after the company reported better-than-expected earnings and raised its full-year outlook, driven by strong AI infrastructure demand.
How is Cisco involved in artificial intelligence?
Cisco builds the high-speed networking equipment and optical systems that connect data centers, which are essential for running AI workloads efficiently.
Is Cisco a good stock to buy now?
Many investors see Cisco as one of the best stocks to buy for balanced exposure to AI infrastructure and strong dividend stability, though competition remains a factor.
What are Cisco’s growth drivers for 2026?
Key drivers include AI networking demand, hyperscaler partnerships, industrial IoT expansion, and the integration of Splunk’s cloud-based security analytics.
What risks should investors consider?
Slower enterprise spending or increased competition from other network providers could impact Cisco’s growth trajectory.
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