Cisco forecasts annual revenue above Wall Street expectations
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- Cisco Systems forecast fiscal 2027 revenue of US$72.2-billion to US$73.4-billion, beating the LSEG analyst average of US$68.69-billion and projecting $7.5B in AI infrastructure orders from hyperscalers.
- Cisco shares dropped more than 4 per cent in extended trading after initially rising 3 per cent, despite the stock already being up more than 60 per cent year-to-date, as Jake Behan of Direxion said the market treated the beat as confirmation of the AI infrastructure story rather than a new catalyst.
- Cisco's fourth-quarter revenue grew 17.6 per cent to US$17.25-billion, topping the US$16.82-billion estimate, with Q4 AI infrastructure orders from hyperscalers alone reaching US$4-billion for a fiscal 2026 total of US$9.3-billion.
- Cisco guided first-quarter adjusted gross margin to 65–66 per cent, slightly below the 66.10-per-cent market estimate, with portfolio manager Joe Tigay of the Rational Equity Armor Fund flagging a more hardware-intensive product mix and elevated component costs.
- Cisco's AI infrastructure backlog reflects sustained build-out by hyperscale cloud providers and enterprises handling generative AI workloads, making networking gear a direct beneficiary of the capex cycle now driving peers like Nvidia.
Why it matters: Cisco cleared a high bar but still lost 4 percent after-hours because the AI-infrastructure trade is now priced for acceleration, not just confirmation. The narrower-than-expected gross margin guidance (65–66% vs. 66.10% expected) signals that hardware-heavy AI orders are squeezing profitability, which is the real risk for shareholders who rode the stock up 60% this year.
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