Cisco beats across the board, but shares fall after hours as expectations rise
Cisco reported fourth-quarter results on Wednesday that topped Wall Street expectations across the board, while its revenue forecast for the next quarter was sharply higher than analysts expected. Even so, the stock fell in after-hours trading. The market's reaction sent a clear message: amid the artificial-intelligence boom, simply beating expectations is no longer enough. According to LSEG data, Cisco reported adjusted earnings of $1.22 per share, compared with expectations of $1.17, and revenue of $17.25 billion, above the $16.82 billion consensus estimate. The forward outlook surprised investors even more. Cisco expects revenue of $18 billion to $18.2 billion for the current quarter, well above the roughly $16.8 billion average analyst estimate. The company also issued quarterly earnings guidance above expectations and a strong outlook for the full fiscal year. Revenue rose 18% from a year earlier to $17.25 billion, while net income jumped 51% to $3.9 billion, or 97 cents per share. Cisco's AI-related business is also gaining scale. Hyperscalers placed $4 billion in infrastructure orders with Cisco during the quarter, bringing cumulative orders for the full fiscal year to $9.3 billion. Those customers contributed about $4 billion in revenue during the last fiscal year. Cisco expects that figure to nearly double to $7.5 billion in fiscal 2027. The figures indicate that Cisco is securing a position in the AI infrastructure wave, particularly in networking equipment. Sentiment toward Cisco had already improved significantly before the earnings report. The stock had gained more than 60% year to date and was up about 8% this month. Investors were betting that the traditional networking-equipment giant could play a more important role in the AI era. That is why, after the company produced genuinely better-than-expected numbers, some investors chose to take profits. The market's demands for AI-related companies have shifted from proving they can participate to proving they can sustain accelerating growth. Cisco's guidance was strong, but against a stock that had already risen sharply, some investors interpreted it as merely in line with expectations or even slightly conservative. In simple terms, the market is now using a higher benchmark. Cisco delivered a solid quarter: revenue and profit both exceeded expectations, AI-related orders continued to build, and next-quarter guidance rose sharply. Those are tangible positive signals. But the stock's reaction is also a reminder that, in a crowded AI narrative, companies must show not only that they are growing, but that the pace of growth can continue to exceed already elevated market expectations. Cisco is currently facing that high-expectations test.
The market's reaction sent a clear message: amid the artificial-intelligence boom, simply beating expectations is no longer enough.
According to LSEG data, Cisco reported adjusted earnings of $1.22 per share, compared with expectations of $1.17, and revenue of $17.25 billion, above the $16.82 billion consensus estimate.
The forward outlook surprised investors even more. Cisco expects revenue of $18 billion to $18.2 billion for the current quarter, well above the roughly $16.8 billion average analyst estimate. The company also issued quarterly earnings guidance above expectations and a strong outlook for the full fiscal year.
Revenue rose 18% from a year earlier to $17.25 billion, while net income jumped 51% to $3.9 billion, or 97 cents per share.
Cisco's AI-related business is also gaining scale. Hyperscalers placed $4 billion in infrastructure orders with Cisco during the quarter, bringing cumulative orders for the full fiscal year to $9.3 billion.
Those customers contributed about $4 billion in revenue during the last fiscal year. Cisco expects that figure to nearly double to $7.5 billion in fiscal 2027.
The figures indicate that Cisco is securing a position in the AI infrastructure wave, particularly in networking equipment.
Sentiment toward Cisco had already improved significantly before the earnings report. The stock had gained more than 60% year to date and was up about 8% this month. Investors were betting that the traditional networking-equipment giant could play a more important role in the AI era.
That is why, after the company produced genuinely better-than-expected numbers, some investors chose to take profits. The market's demands for AI-related companies have shifted from proving they can participate to proving they can sustain accelerating growth. Cisco's guidance was strong, but against a stock that had already risen sharply, some investors interpreted it as merely in line with expectations or even slightly conservative.
In simple terms, the market is now using a higher benchmark.
Cisco delivered a solid quarter: revenue and profit both exceeded expectations, AI-related orders continued to build, and next-quarter guidance rose sharply. Those are tangible positive signals.
But the stock's reaction is also a reminder that, in a crowded AI narrative, companies must show not only that they are growing, but that the pace of growth can continue to exceed already elevated market expectations. Cisco is currently facing that high-expectations test.