Cisco CEO Rejects AI Bubble Concerns, Cites Multi-Year Tailwind
Cisco's CEO Chuck Robbins recently addressed concerns about an AI bubble in an interview with Jim Cramer on CNBC. He framed the current AI networking buildout as a multi-year tailwind rather than a cyclical spike.
Cisco posted a 15% revenue growth in its latest quarter, exceeding analyst consensus of 9%. Robbins attributed this to investments in silicon and optics, as well as the company's decision to sell hyperscalers any combination of these components. He noted that even a few years ago, Cisco effectively did nothing with hyperscalers.
Robbins credited the rapid expansion of the company's business lines to the momentum of hyperscalers. The order book showed triple-digit growth for all four major hyperscalers, as well as 30% orders growth in telco and public sector businesses.
Cisco reported $4 billion of AI-related orders in Q4 alone and $9.3 billion across fiscal 2026. It is guiding to $7.5 billion of AI infrastructure revenue in fiscal 2027. Robbins highlighted the structural shift beneath the orders: data center-to-data center connectivity traffic is 14 times higher in the AI era, and hyperscalers spend roughly 13-14% of their capex in Cisco's addressable market.
Robbins emphasized that the customers making these investment decisions are massive and have strong balance sheets. He noted that these companies view this transition as existential.