Cisco cites networking supercycle courtesy of AI boom

Cisco reported strong fourth quarter results and said AI is driving a networking supercycle.

The company said it saw broad demand "with a networking supercycle underway." Cisco reported fourth quarter earnings of $3.9 billion, or 97 cents a share, on revenue of $17.3 billion, up 18% from a year ago. Non-GAAP earnings were $1.22 a share in the fourth quarter.

Wall Street was expecting Cisco to report fourth quarter non-GAAP earnings of $1.17 a share on revenue of $16.83 billion.

CEO Chuck Robbins said the company's performance is "a testament to the accelerated pace of innovation and the excellent execution by our teams."

Cisco said fourth quarter product orders were up 35% compared to a year ago and up 25% excluding hyperscalers. Networking product orders were up 40% in the fourth quarter.

The company said it took $4 billion in AI infrastructure orders from cloud hyperscalers in the fourth quarter.

By the numbers:

• Networking revenue in the fourth quarter was $9.79 billion, up 28% from a year ago.
• Security revenue of $2.23 billion was up 14% from the fourth quarter a year ago.
• Collaboration revenue in the fourth quarter was up 12% and observability showed growth of 6%.

For fiscal 2026, the company reported earnings of $3.33 a share on revenue of $63.3 billion, up 12% from a year ago.

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As for the outlook, Cisco projected first quarter revenue to be between $18 billion to $18.2 billion with non-GAAP earnings of $1.32 a share to $1.34 a share.

For fiscal 2027, Cisco is expecting revenue of $72.2 billion to $73.4 billion with non-GAAP earnings of $5.05 a share to $5.11 a share.

Robbins said the following on the earnings call:

• "In enterprise, Nexus switch orders tagged for AI deployments were up more than 85% sequentially. As these customers look to scale AI economically, there is increasing focus on managing token consumption, selecting the right model in the right location for each workload. We believe on-premise AI infrastructure will become an important option for enterprise customers as they look to optimize both the business value and cost of AI."
• "Enterprises need GPU clusters on-premise and at the edge with low latency, high bandwidth networking, and built-in security, observability, and automation, all of which Cisco can provide in a co-design, vertically integrated stack."
• "We see the momentum in campus networking being driven by infrastructure modernization to both scale AI initiatives and to strengthen defenses against a rapidly evolving cyber landscape."