Cisco Systems shares posted their biggest gain since the Dot-Com boom-and-bust era after the networking giant delivered third-quarter results that beat analysts' estimates. The company also announced a workforce restructuring, aligning with a broader hyperscaler playbook that cuts labor costs and redirects capital toward AI infrastructure and data-center buildouts.
Cisco raised its fiscal 2026 outlook, guiding for$62.8 billion to $63 billion in revenueand$4.27 to $4.29 in adjusted EPS, while also issuing a stronger-than-expected fourth-quarter sales forecast.
The catalyst that sent shares into a parabolic move early in the U.S. cash session was demand for AI. Cisco boosted its expected fiscal 2026hyperscaler AI orders to $9 billion from $5 billion, signaling stronger traction in supplying the networking infrastructure needed for data center buildouts. Shares surged more than16%, marking their best day since May 2002.
UBS analyst Simon Penn summed up third-quarter results and guidance:
They reported EPS and revenue beat and Q4 guided EPS and revenue was upgraded.
Q3 EPS was $1.06 versus forecasts of $1.04 and Q3 revenue was $15.8 bn versus forecasts of $15.5 bn.
Looking forward, they increased Q4 EPS guidance to $1.16-1.18, above forecasts of $1.07. Q4 revenue guidance also beat, at $16.7-$16.9bn versus estimations of $15.82.
Cisco reported FY2026 orders from hyperscalers $9 bn, up from prior $5 bn.
CEO Chuck Robbins wrote in a blog, "The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest."
"While we are reducing roles in some areas, we are making clear, strategic investments," Robbins added. That includes spending on chips, fiber optics, security, and the use of AI by its own employees, he noted.
Source: ZeroHedge News
