Cisco Slides Despite Q4 Beat as AI Demand Continues to Soar

Cisco Systems Inc., a leading networking equipment supplier, reported strong fiscal fourth-quarter earnings and raised its outlook on surging demand for artificial intelligence hardware. The company's shares slid late on Wednesday, despite beating Wall Street expectations.

Cisco posted net profit of $3.86 billion, or $0.97 per share, for the quarter ended July 25, a 51% surge compared to the same period last year. Quarterly revenue surged 18% year-over-year to $17.25 billion, beating consensus expectations of $16.83 billion.

The growth was primarily spearheaded by a 24% leap in hardware sales, while service revenues remained steady. Hyperscalers such as Microsoft Corp., Alphabet Inc.'s Google, and Amazon.com Inc. are racing to build data center capacity to power generative AI applications.

Cisco logged $4 billion in AI infrastructure orders from hyperscalers during the fourth quarter alone, bringing the full fiscal year total to $9.3 billion, nearly double the $5.3 billion reported through May. The company expects AI orders to be meaningfully higher in FY27.