TLDR
- Cisco (CSCO) shares surged 7.22% in premarket trading after raising annual revenue and profit guidance
- The company reported $2 billion in AI-related orders for fiscal 2025, mostly from hyperscaler clients
- Cisco expects $3 billion in AI infrastructure revenue during fiscal 2026
- Fiscal 2026 revenue guidance increased to $60.2-$61 billion from prior $59-$60 billion estimate
- Hyperscaler AI infrastructure orders totaled $1.3 billion in the quarter ending October 25
Cisco shares climbed 7.22% in premarket trading Thursday after the networking equipment maker raised its annual forecasts. Strong cloud infrastructure demand drove the guidance increase.
The company revealed it captured $2 billion in AI-related orders for fiscal 2025. Hyperscalers accounted for nearly all of these orders.
CEO Chuck Robbins announced the figures Wednesday. He projected $3 billion in AI infrastructure revenue for fiscal 2026.
The quarter ending October 25 brought $1.3 billion in AI infrastructure orders from hyperscalers. These cloud computing providers continue expanding their data center footprints.
Strong Demand Across Customer Segments
Cisco serves cloud providers, enterprise customers, and telecom companies with networking equipment. The company has capitalized on accelerating cloud migrations and campus network upgrades.
J.P. Morgan analysts highlighted momentum in enterprise customer orders. They see this supporting a strong campus network refresh cycle.
However, analysts noted investors are focused on AI order acceleration. The growth rate has surpassed earlier forecasts.
Technology giants are fueling this demand surge. Alphabet, Microsoft, Meta, and Amazon have all committed to higher capital spending on data centers and advanced chips.
Robbins pointed to a sales pipeline exceeding $2 billion. This covers high-performance networking products for sovereign customers, neocloud providers, and enterprise buyers.
Updated Revenue Projections
Cisco raised its fiscal 2026 revenue outlook to $60.2 billion to $61 billion. The company previously projected $59 billion to $60 billion.
The stock has climbed nearly 25% year to date. Investors see Cisco as a key beneficiary of AI infrastructure spending.
Cisco’s forward price-to-earnings ratio stands at 17.73. Arista Networks trades at 40.90, while Dell Technologies has a forward P/E of 12.83.
The company continues benefiting from AI infrastructure spending cycles. Businesses need upgraded networking equipment to support increased data center workloads.
Hyperscaler Momentum Builds
Robbins confirmed hyperscalers provided the majority of AI orders in fiscal 2025. These massive cloud operators require extensive networking infrastructure for their data center operations.
The $1.3 billion in hyperscaler orders during the latest quarter shows sustained demand momentum. This segment represents a growing revenue opportunity for Cisco.
The company projects this trend will extend into fiscal 2026. The expected $3 billion in AI infrastructure revenue marks substantial growth in this business line.
The $2 billion pipeline for high-performance networking products spans multiple customer types. Sovereign customers, neocloud providers, and enterprise clients all contribute to future order potential.
Cisco’s raised guidance reflects confidence in continued AI infrastructure spending. The company has positioned itself to capture demand as hyperscalers and enterprises expand their network capabilities.
The quarter ending October 25 demonstrated strong order momentum. The $1.3 billion in hyperscaler AI infrastructure orders exceeded expectations and supports the company’s optimistic fiscal 2026 outlook.
Cisco raised fiscal 2026 revenue guidance to $60.2-$61 billion after securing $2 billion in AI orders and $1.3 billion in hyperscaler orders during latest quarter.
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