SAN JOSE, Calif., Feb 11, 2026, 14:31 PST
- Cisco raised its fiscal 2026 revenue outlook to between $61.2 billion and $61.7 billion, driven by stronger demand tied to AI.
- Shares dropped roughly 5% in after-hours trading despite beating earnings estimates and providing strong guidance
- Cisco reported $2.1 billion in AI infrastructure orders from hyperscalers, with product orders climbing 18%
Cisco Systems (CSCO.O) boosted its full-year revenue and adjusted profit outlook on Wednesday, citing increased customer spending on networking equipment. The surge comes as companies upgrade data centers and office networks to support artificial intelligence, including wireless and IoT—short for internet-connected devices.
Timing is critical. Investors want hardware firms to prove that AI expansion is reaching beyond just chips and into the data pipelines—backed by solid numbers, not empty slogans.
Cisco long described its core switching and routing business as “mature.” Now, the company says network upgrades are once again a priority, driven by AI workloads and widespread corporate network refreshes.
Cisco reported adjusted earnings of $1.04 per share on $15.35 billion in revenue for its fiscal second quarter, beating forecasts of $1.02 and $15.11 billion. Despite the beat, shares dropped 5.5% in after-hours trading. The company expects third-quarter revenue between $15.4 billion and $15.6 billion, with adjusted earnings ranging from $1.02 to $1.04 per share.
Cisco reported an 18% jump in product orders compared to last year, with networking orders climbing more than 20%. The company secured $2.1 billion in AI infrastructure deals from hyperscalers—the biggest cloud data-center operators—and highlighted a multi-year refresh cycle for campus networking, connecting offices and plants internally. Cisco raised its quarterly dividend by 2% to 42 cents and returned $3.0 billion to shareholders through buybacks and dividends.
Revenue climbed 10% in the quarter ending Jan. 24, driven by a 14% jump in product sales, while services dipped 1%, Cisco reported. Networking revenue surged 21%, and collaboration grew 6%, but security dropped 4%, and observability—a monitoring segment—held steady. The company also completed acquisitions of NeuralFabric and EzDubs. CEO Chuck Robbins said Cisco is “uniquely positioned” to provide “trusted infrastructure” for the AI era. CFO Mark Patterson touted the company’s path toward its “strongest revenue year yet.” Cisco noted that its margin and earnings guidance factors in the expected impact of tariffs under current trade policies. Cisco Newsroom
Cisco faces competition from Arista Networks and Juniper Networks in data-center switching, while Palo Alto Networks challenges it in cybersecurity. Raymond James analyst Simon Leopold noted in a pre-earnings report that Cisco’s security division “continues to trail peers.” Bloomberg
Yet the AI data center spending cycle can shift fast, particularly when a handful of big customers control the orders. If cloud expansions stall or campus upgrades slow down, Cisco will have to rely more on weaker segments like security, where margins often feel the pinch from rising component prices.
Cisco is currently banking on continued network spending. Investors are keen to see if the recent spike in AI-driven orders turns into consistent revenue growth quarter after quarter.
