Cisco Systems posted stronger-than-expected fiscal Q1 results, driven by surging demand for artificial intelligence networking products, pushing the stock higher as its January-quarter revenue forecast exceeded Wall Street expectations.
Including Splunk, Cisco’s Q1 adjusted earnings rose 10% to USD 1 per share, while revenue increased 8% to USD 14.9 billion, beating analyst estimates of 98 cents and USD 14.78 billion. AI-related infrastructure orders jumped to more than USD 1.3 billion, up from USD 800 million last quarter, as cloud providers expanded AI-focused data centers and upgraded ethernet networks. Overall product orders grew 13%, compared to 7% previously.
Chuck Robbins, Chair and CEO of Cisco, said:
“We had a solid start to fiscal 2026, and Cisco is on track to deliver our strongest year yet. The widespread demand for our technologies highlights the critical role of secure networking and the value of our portfolio as customers move quickly to unlock the potential of AI.”
Bank of America lifted its price target to 95 from 85, citing Cisco’s strong positioning for enterprise AI adoption. Analysts also attribute momentum to Cisco’s NVIDIA partnership and its plans to build AI servers competing with Dell.
For the current quarter, Cisco expects revenue of about USD 15.1 billion, above analysts’ USD 14.62 billion forecast. The company projects AI sales to reach USD 1 billion in fiscal 2025 and USD 3 billion by 2026, with orders expected to double to USD 4 billion.
Mark Patterson, CFO of Cisco, said:
“We delivered a strong quarter, with top and bottom-line performance exceeding our guidance, as well as solid margins and operating cash flow. Our relevance in AI continues to build and we have a multi-year, multi-billion-dollar campus refresh opportunity starting to ramp, with strong demand for our refreshed networking products. Looking ahead, you can expect a continued focus on profitable growth, capital returns, and strategic investments to capture the significant opportunities ahead.”
Despite the upbeat AI outlook, analysts note slower growth in Cisco’s non-AI business, underperformance in security, and mounting competition across key segments.
Cisco shares rose more than 4% to 77.24 in morning trading and remain in a buy zone after climbing over 24% year-to-date.
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