Cisco Projects AI Network Sales to Double After Record Quarter

2026-11-13 companies

San Jose, Thursday, 12 November 2026.
Cisco surpassed quarterly forecasts as accelerating data center demand prompted leadership to project $9 billion in artificial intelligence sales this fiscal year, more than doubling previous annual benchmarks.

Cisco’s Strong Quarter Sets the Stage for AI Growth

Networking hardware giant Cisco Systems Inc. (NASDAQ: CSCO) delivered a standout quarter on November 12, 2026, reporting adjusted earnings per share of $1.40 against Wall Street’s $1.33 estimate, while revenue reached $18.5 billion compared to the $18.1 billion expected [1]. The performance marked a 24% year-over-year revenue increase from $14.88 billion in the same period last year, with net income climbing to $4.6 billion, or $1.14 per share, up from $2.9 billion ($0.72 per share) a year earlier [1]. The company’s stock rose in extended trading following the announcement, reflecting investor confidence in its strategic pivot toward artificial intelligence infrastructure after initially lagging in the early stages of the AI boom [1].

AI Infrastructure Revenue Projections Signal Momentum

Cisco revised its forecast for AI infrastructure revenue to $9 billion for the current fiscal year, more than doubling its prior annual benchmark of $3.8 billion in fiscal 2026 [1]. This aggressive projection underscores the company’s success in capturing enterprise and hyperscaler demand for high-capacity networking solutions, including switches, routers, and data center connectivity [2]. Management highlighted that organizations are increasingly turning to Cisco for its ‘trusted, market-defining technology’ to scale, secure, and optimize environments for the ‘agentic AI era,’ according to CEO Chuck Robbins’ statement [1].

Market Response and Analyst Sentiment

Cisco’s stock performance has been robust, gaining approximately 35% year-to-date through November 12, 2026, outpacing the Nasdaq’s 9% gain over the same period [2]. Analysts have also taken notice: Piper Sandler recently adjusted its price target for Cisco to $125 from $132 while maintaining a Neutral rating, while Wells Fargo maintained an Overweight rating with a target of $115 [5]. Morgan Stanley, however, downgraded Cisco to Equal Weight on November 5, 2026, citing concerns over pull-forward risk and cloud service profitability, and lowering its price target to $120 from $135 [5][6]. The stock’s trajectory remains a focal point as it tests resistance around $102, having reached an all-time high of $130.37 in June 2026 before declining to a low of $93.35 in early November [5][6].

Future Outlook and Strategic Positioning

Looking ahead, Cisco guided for second-quarter revenue between $18 billion and $18.2 billion, exceeding the LSEG consensus estimate of $17.88 billion, with adjusted earnings per share projected at $1.34 to $1.36, surpassing the $1.23 average estimate [1]. Analysts anticipate AI-related revenue to reach $7.5 billion in fiscal 2027, representing roughly 10% of total sales—a significant leap from less than 2% two years prior [3]. This growth is expected to be driven by demand for Silicon One and optical products, as Cisco expands its AI infrastructure sales beyond hyperscalers to enterprise customers [4]. The company’s focus on high-speed connectivity for AI data centers positions it to capitalize on the broader AI ecosystem, which remains highly sensitive to earnings momentum and technological advancements [6].

Sources

artificial intelligence Cisco Systems