Cisco Stock Surges on Earnings Beat and Robust AI Demand Forecast

Bassyonni

ago 2 hours

Cisco Stock Surges on Earnings Beat and Robust AI Demand Forecast

Cisco Systems Inc. (CSCO) recently reported impressive fiscal first-quarter earnings, driven by a surge in demand for its artificial intelligence (AI) products. The company’s revenue for the period ending October 25 increased by 8%, reaching $14.9 billion, surpassing analysts’ expectations.

Cisco’s Earnings Snapshot

For the fiscal first quarter, Cisco’s adjusted earnings rose by 10% to $1 per share, outperforming the forecasted earnings of 98 cents. Analysts had projected revenues to be around $14.78 billion, illustrating the company’s stronger-than-anticipated performance.

AI Order Growth

A significant factor in Cisco’s improved outlook is the growing demand for AI infrastructure. The company reported that AI-related product orders surpassed $1.3 billion, a substantial increase from $800 million in the prior quarter. This growth is fueled by new AI-centered data centers that cloud computing companies are developing.

Overall product orders rose by 13%, up from 7% in the previous quarter.
Cisco’s AI initiatives are bolstered by a partnership with Nvidia (NVDA).

Future Projections

Looking ahead, Cisco anticipates revenue of approximately $15.1 billion for the upcoming quarter, outperforming analysts’ predictions of $14.62 billion. Chief Financial Officer Mark Patterson indicated that the company’s relevance in AI is significantly increasing, suggesting a multi-billion-dollar opportunity for campus refreshes in networking products.

Market Reaction

Following the earnings announcements, Cisco stock surged over 7%, closing at $79.16 in after-hours trading. The stock has already risen by more than 24% year-to-date in 2025, reflecting strong market confidence. Cisco has established a key entry point for investors at 72.55, which currently falls within a favorable buy zone.

Strategic Acquisitions

Cisco has been strategically pivoting from its traditional product offerings of network switches and routers. A notable part of this strategy includes the recent $25 billion acquisition of software company Splunk, which specializes in data analytics and cybersecurity.

Technical Ratings

As per the IBD Stock Checkup, Cisco’s Composite Rating stands at 89 out of a possible 99, indicating strong overall performance. Its Accumulation/Distribution Rating of B-minus suggests a healthy balance of buying activity in the stock.