Cisco Systems is the latest tech hardware company to post strong results thanks to ongoing demand for AI, although its stock dropped after the report.
For its fiscal fourth quarter, which ended July 25, the company reported adjusted earnings of $1.22 per share on $17.3 billion in revenue. These results beat analyst expectations of $1.17 per share and $16.8 billion in revenue.
Cisco’s networking segment, which covers equipment for AI data centers, was a major reason for the strong results. Revenue in this area rose 28% from last year to $9.79 billion, beating analyst estimates. The company also said that AI infrastructure orders from large cloud providers for fiscal 2026 reached $9.3 billion, which is higher than its updated guidance from earlier this year after it raised its full-year order target due to strong demand.
Looking forward, Cisco expects fiscal 2027 earnings of $5.05 to $5.11 per share and revenue between $72.2 billion and $73.4 billion. These forecasts are well above Wall Street’s earlier estimates of $4.83 per share and $69.1 billion in revenue. CEO Chuck Robbins said Cisco’s wide range of products and strong secure networking help the company support customers no matter how or where they use AI infrastructure.
Even with strong results and guidance, Cisco shares dropped nearly 6% in Thursday’s premarket trading after first rising on the news. This drop may be due to worries about shrinking profit margins. The total gross margin was 66.3%, down from 68.4% a year ago, possibly because of higher costs for AI hardware parts like memory.
Expectations heading into Expectations were high before the report, as Cisco shares had risen 61% this year thanks to strong demand for AI hardware. Cisco is not the only company seeing these gains. Super Micro Computer also reported better-than-expected quarterly results and strong full-year revenue guidance earlier in the week, driven by strong demand for its server equipment
