Cisco reported strong earnings on Wednesday, beating Wall Street’s expectations and offering an upbeat forecast for the future. The secret to its success? A big and growing bet on artificial intelligence. The company revealed it’s seeing a surge in orders for the high-powered networking gear needed to run AI systems, showing its AI strategy is starting to pay off in a big way.
For the quarter, Cisco brought in $14.67 billion in revenue, a 7.6% increase from last year. The company’s forecast for the next quarter and the full fiscal year also came in ahead of what analysts were expecting. The positive news reflects the market’s confidence, as Cisco’s stock has jumped 19% this year, easily outpacing the broader S&P 500.
CEO Chuck Robbins made it clear that AI is central to the company’s future. “I don’t feel like AI’s a fleeting trend,” he said on a call with analysts. He backed that up with numbers, revealing that AI infrastructure orders from big web companies hit $800 million in the last quarter alone. For the full year, those orders topped $2 billion, more than double the company’s goal.
While the company’s core networking division saw strong 12% growth, its security business was a little weaker, coming in just below analyst estimates. And despite the good news, Cisco’s finance chief, Mark Patterson, cautioned that they are still operating in a “complex environment,” a nod to ongoing trade tensions and economic uncertainty. Still, the message from the earnings report was clear: the AI boom is here, and Cisco is riding the wave.
