Cisco Earnings to Test $9 Billion AI Order Momentum

Cisco Systems will report its fiscal fourth-quarter earnings on Wednesday, and options traders are bracing for a significant price swing in excess of 8% as investors await confirmation that the networking equipment maker's AI infrastructure narrative can sustain its impressive year-to-date rally.

Shares of Cisco have more than quadrupled since January, outperforming the S&P 500 by nearly fivefold. The options market is pricing in a move of approximately $10.13 per share, which translates to an upside target near $132.70 and a downside floor around $112.44.

The elevated expectations reflect the stakes surrounding Cisco's AI infrastructure momentum, which has been the primary driver behind its stock price surge. Analysts are forecasting earnings per share of $1.17, a 18% year-over-year increase, on revenue of roughly $16.83 billion, up about 15%. The company has consistently beaten both top- and bottom-line expectations over the past two years.

UBS analyst David Vogt believes industry checks point to intensifying AI infrastructure demand during the quarter, which could drive Cisco's networking revenue estimate of $9.6 billion, representing a 26% year-over-year growth rate. He projects product order growth of 29%, slightly decelerating from the prior quarter's 35% pace.

While revenue appears constructive, profitability metrics will draw equal scrutiny. Citi analyst Atif Malik highlighted that elevated component pricing may constrain gross margin expansion even if revenue comes in ahead of expectations.