Cisco Rides AI Wave to Record Growth as Cyber Risks Loom
Cisco Systems is experiencing rapid growth due to increasing demand for its networking products from hyperscalers and cloud providers, driven by the need for advanced infrastructure to support artificial intelligence (AI) applications.
President Jeetu Patel attributes the company's 35% growth in bookings and 18% revenue growth last quarter to increased demand for AI-driven networking solutions. He notes that this growth is not just a sector-wide trend but a specific result of Cisco's focus on delivering integrated silicon, switches, photonics, optics, and software to support AI infrastructure.
Cisco has signed over $10 billion in deals with hyperscalers and neocloud providers this fiscal year, and expects 70% of its software products to be entirely AI-written by the end of next year. The company will invest around $8 billion on R&D in 2024, a significant increase from previous years.
Patel acknowledges that the sector is experiencing frothy valuations and mounting security concerns, but emphasizes that Cisco's vertically integrated approach gives it a stronger supply chain position than its competitors. He also warns of potential risks associated with AI, including increased vulnerability to cyber attacks and poor judgment by agents exercising autonomy.