Cisco designs and sells networking hardware, software, and services that help organizations connect, protect, and manage data. Its products include networking gear, security solutions, cloud services, and collaboration tools like Webex to support hybrid work. Cisco differentiates itself with a broad, integrated stack—routing and switching, security, cloud, and collaboration—that works together at scale. Its goal is to help customers securely connect people, devices, and applications, enabling reliable communication and digital transformation across enterprises of all sizes.
Company Size
10,001+
Company Stage
IPO
Headquarters
San Jose, California
Founded
1984
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Cisco Systems investors should focus on one key metric: growth outside AI infrastructure, which management expects to reach about 10% in fiscal 2027. Whilst AI infrastructure generates headlines, it represents only 6% of Cisco's revenue, with the remainder coming from networking and security products sold to enterprises and telecoms. The company's product orders rose 35% year-on-year in fiscal Q4 2026, with Wi-Fi 7 accounting for over half of wireless orders. Management forecasts fiscal 2027 revenue of $72.2 billion to $73.4 billion, with $7.5 billion from AI infrastructure. However, challenges loom. Comparisons become tougher in the second half of fiscal 2027, gross margins face pressure from increased hardware shipments, and price increases contributed about 5 percentage points to recent revenue growth. The stock trades at 31.8 times earnings, above the S&P 500's 21.9 multiple, leaving little margin for error.
Cisco CEO Chuck Robbins has warned employees uncomfortable with rapid change that "nothing's going to feel good right now" as AI transforms the workplace. Speaking to Inc., Robbins said workers "have no choice but to at least keep up" with the pace of technological change driven by industry leaders. The head of the $415 billion company argues firms should view AI as an "innovation enhancement play" rather than a cost-reduction tool, enabling companies to deliver more with existing staff rather than cutting headcount. However, Cisco cut around 4,000 jobs earlier this year during a restructuring towards AI. Robbins noted that even AI leaders like Anthropic's Dario Amodei and OpenAI's Sam Altman have called for slower model development. Goldman Sachs economists estimate AI has eliminated approximately 16,000 net jobs monthly over the past year.
Cisco Systems trades at $106 per share, or 24.6 times its fiscal 2026 non-GAAP earnings per share of $4.33. However, based on fiscal 2027 guidance and analyst forecasts, the valuation drops to 20.6 times earnings, with the company guiding non-GAAP earnings of $5.05 to $5.11 per share for that period. The company's fastest-growing segment is AI infrastructure for hyperscalers, which generated $9.3 billion in orders during fiscal 2026, 4.5 times the previous year's total. Management projects this business to deliver $7.5 billion in revenue for fiscal 2027. Cisco expects non-GAAP operating margins to reach approximately 35% in fiscal 2027, a company record. The company's remaining business is projected to grow around 10% in fiscal 2027, with campus networking product orders increasing 20% year-over-year in the fourth quarter of fiscal 2026.
Internet2 is expanding the National Research Platform (NRP) through a partnership with Cisco, deploying new AI PODs at the University of Nebraska–Lincoln and Sacramento State. The AI PODs add GPU capacity that researchers can access when local resources are insufficient. The Cisco AI PODs provide pre-validated compute, networking, and management capabilities that can be deployed as standardised units. This approach reduces engineering and integration work required to add new resources to the platform. Combined, the AI PODs provide 8 NVIDIA H200 GPUs with 1.1 TB of GPU memory, 128 CPU cores, 2 TB of system memory, and 90 TB of NVMe flash storage. The NRP is a community-operated platform supported by the National Science Foundation and over 70 participating organisations, pooling computing resources across the US to give researchers access to capabilities beyond their local institutions.
Cisco Systems trades at 32.1 times earnings, nearly matching Dell Technologies' 31.9 multiple, despite growing revenue just 11.8% over twelve months compared to Dell's 49%. The valuation gap partly reflects Cisco's superior 25.4% operating margin versus Dell's 9.6%. The company's premium also anticipates faster growth ahead. Cisco secured $9.3 billion in AI infrastructure orders from hyperscalers in fiscal 2026, 4.5 times the prior year's total, though revenue lagged at roughly $4 billion. For fiscal 2027, Cisco guides revenue between $72.2 billion and $73.4 billion, representing 15% growth. AI infrastructure revenue from hyperscalers is expected to reach $7.5 billion. However, price increases contributed 5 percentage points to Q4 growth and will add 4 to 5 points in fiscal 2027. Rising memory costs and hardware mix are pressuring gross margins.