- Reports Q3 revenue of $15.8 billion, beating estimates of $15.5 billion
- Raises full-year AI-related revenue guidance to $4 billion from $3 billion
- Announces restructuring plan to cut roughly 5% of its global workforce
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Cisco stock surges 15% after AI orders power strong Q3 earnings beat
Cisco Systems (CSCO) reported fiscal third-quarter revenue of $15.8 billion, a 12 percent year-over-year increase that beat analyst estimates, as demand for its AI-powering infrastructure surged.
"We saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI," Cisco CEO Chuck Robbins said in a statement.
The networking equipment provider posted earnings per share of $0.85, a 37 percent annual increase that surpassed consensus estimates of $0.76. Cisco raised its full-year revenue guidance from its artificial intelligence products to $4 billion, up from a previous forecast of $3 billion. The company also boosted its fiscal 2026 order forecast to $9 billion from $5 billion.
Shares surged 15 percent in pre-market trading on the news, positioning the stock for a record high. The strong results and guidance suggest Cisco is successfully capturing a significant share of the multi-billion dollar network infrastructure buildout required by the artificial intelligence boom.
In conjunction with its earnings, Cisco announced a restructuring plan that will impact about 5 percent of its global workforce, or just under 4,000 employees. The company said the move was necessary to realign expenses and investments to capitalize on the AI opportunity, with a focus on "silicon, optics, security, and in our employees’ use of AI across the company.”
The results from Cisco, a bellwether for enterprise tech spending, echo strong AI-driven reports from other technology firms this week. Both Applied Materials (AMAT) and Figma (FIG) also reported better-than-expected results and raised forecasts, citing strong demand related to artificial intelligence.
The guidance raise signals management's confidence that demand for AI-related networking hardware will continue to accelerate. Investors will watch for further details on the restructuring and the margin impact of new AI products during the company's upcoming investor call.
This article is for informational purposes only and does not constitute investment advice.
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