Cisco Shares Drop 9% Despite Record AI Sales and Higher Guidance
San Jose, Thursday, 13 August 2026.
Cisco’s stock dropped 9% on August 13, 2026, despite record Q4 revenue of $17.3 billion, as investors worried about future growth and conservative guidance.
Market Reaction and Financial Performance
On Thursday, 13 August 2026, Cisco Systems (NASDAQ: CSCO) shares fell 9% despite reporting fourth-quarter financial results that exceeded Wall Street expectations [1][4]. The networking giant’s stock decline occurred even as the company provided stronger-than-expected forward guidance, highlighting heightened investor scrutiny regarding tech valuations and AI monetization timelines [1]. For the fiscal fourth quarter ended July 25, 2026, Cisco reported revenue of $17.3 billion, representing an 18% increase year over year [2]. This performance surpassed analyst estimates which had averaged $16.8 billion, with non-GAAP EPS reaching $1.22, up 23% from the previous year [1][2].
AI Demand and Future Outlook
A key driver of growth was the demand for artificial intelligence infrastructure, with hyperscalers placing $4 billion of infrastructure orders in the quarter alone [1]. Total AI infrastructure orders for fiscal 2026 reached $9.3 billion, with revenue recognized at approximately $4 billion for the year [2]. Looking ahead, Cisco expects AI infrastructure revenue to grow to $7.5 billion in fiscal 2027, implying a projected growth rate of 87.5 percent from the prior fiscal year’s recognized revenue [2][3]. Despite the strong results, some analysts noted that the guidance appeared conservative given the current demand environment, though KeyBanc Capital Markets remained bullish on market share gains [1].