Cisco Systems (NASDAQ:CSCO) jumped more than 7% in premarket trading on Thursday after the company lifted its full-year financial guidance, citing accelerating demand for networking hardware tied to the rapid buildout of AI-driven data centers.
The tech group now expects fiscal 2026 revenue of $60.2 billion to $61 billion, up from its prior range of $59 billion to $60 billion. Cisco also raised its outlook for adjusted earnings to $4.08 to $4.14 per share, compared with the earlier forecast of $4 to $4.06.
CEO Chuck Robbins said the company anticipates generating $3 billion in AI infrastructure revenue this year, noting that hyperscalers—operators of massive, scalable computing environments—were the primary growth engine. Morgan Stanley analysts flagged that Cisco logged $1.2 billion in AI-related orders during its fiscal first quarter.
“AI [is] connecting Cisco to more growth opportunities,” analysts at Morgan Stanley including Meta Marshall and Mary Lenox wrote in a research note.
Robbins told investors that AI momentum is reshaping customer spending across the company’s core networking portfolio. “Within our campus networking portfolio, we are seeing very strong demand for switching, routing, and wireless products, indicating that enterprise customers are investing in the connectivity needed for AI deployments,” he said.
He added: “Product orders for AI use cases beyond hyperscaler training are also gaining traction, with orders for data center systems, including switching and compute, growing double digits in Q1 as customers prepare their networks for inferencing and agentic workflows.”
Cisco shares have climbed about 25% year-to-date as businesses rush to upgrade data centers and migrate workloads to the cloud, aiming to capture new opportunities created by generative AI adoption.
For the quarter ending in October, Cisco delivered adjusted earnings of $1.00 per share on revenue of $14.88 billion, topping analyst expectations of $0.98 and $14.77 billion, respectively.
Vital Knowledge analysts described the results as a “healthy beat-and-raise” and pointed to “rising contribution from the hyperscaler AI buildout and a continued refresh in enterprise networks.” However, they noted that sentiment remains fragile amid concerns about stretched tech valuations.
“[I]nvestors lately have adopted a ’glass half empty’ attitude to tech news, which means some people may decide to focus on the (modest) sales shortfalls” in Cisco’s security and collaboration businesses, as well as a slight sequential decline in remaining performance obligations, they wrote.