Cisco Sees Boom in Network Traffic from AI Agents

Cisco Systems, the networking and cybersecurity infrastructure leader, has reported that AI agents now consume about 60% of global inference capacity. This surge in demand has given Cisco a significant boost in revenue, with the company delivering $17.3 billion in fiscal fourth-quarter revenue, an 18% increase powered by a 28% jump in networking sales.

The growth is primarily driven by AI-infrastructure orders from hyperscalers, which hit $4 billion for the quarter and $9.3 billion for the full year. Management notes that AI agents require about 450% more network bandwidth than people completing similar tasks.

While this growth in demand is a boon for Cisco, it also presents challenges, particularly with rising memory costs and pressure from its hardware-heavy sales mix. The company's shares have gained approximately 0.3% to $109.59 on the news, but remain trading 47.6% above their GF Value estimate of $74.25.