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Cisco beats on earnings, says AI infrastructure revenue will double this fiscal year
Cisco shares rose in extended trading after the networking equipment maker reported fiscal first-quarter revenue and earnings above analyst expectations. The results and a sharply higher forecast for AI infrastructure sales signal that Cisco is seeking a larger role in the AI buildout after missing its early stages.
Revenue grew 24% year on year to $14.88 billion, while net income increased to $4.6 billion, or $1.14 per share, from $2.9 billion, or 72 cents, a year earlier. Cisco expects AI infrastructure revenue from hyperscalers to reach $9 billion this fiscal year, more than double the fiscal 2026 figure; for the second quarter, it forecast revenue of $18 billion to $18.2 billion and adjusted earnings of $1.34 to $1.36 per share, both above analyst averages.
In short
- Cisco beat first-quarter earnings and revenue estimates.
- AI infrastructure sales are forecast to reach $9 billion.
- Second-quarter guidance also topped analyst expectations.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Cisco’s strong results and higher forecast suggest it can turn rising demand for AI computing into durable growth, building on its networking expertise and expanding its role with major cloud providers. A larger AI business could strengthen its competitiveness and reward investors while supplying infrastructure needed for wider AI adoption.
The case against
The forecast points to a substantial opportunity, but it does not establish that today’s demand will persist or translate into lasting profits. Cisco is trying to gain ground after missing the early stages of the AI buildout, and relying on large hyperscaler customers and continued heavy investment could leave it exposed if spending slows or rivals capture more of the market.
Explained simply
Cisco makes networking equipment, including the switches and routers that move data between computers and data centres. As companies build services using artificial intelligence, they need more computing capacity and fast connections between large groups of servers.
The main buyers Cisco refers to as “hyperscalers” are very large cloud and technology companies that run data centres at scale. Their spending on AI infrastructure can create a significant market for equipment makers, though demand depends on how quickly those companies expand their systems.
Cisco’s position matters because it has long supplied the networks that connect businesses and data centres, while the current AI investment boom is creating new demand for high-speed infrastructure. Its ability to win a larger share of that spending could affect its future growth and how it competes with other technology suppliers.
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