Cisco Stock Plunges Amid AI Hardware Margin Pressure

Cisco Systems, Inc., a leading technology company, saw its stock drop 8.4% after reporting record quarterly revenue and beating earnings expectations.

The decline was largely due to decreased non-GAAP gross margin by 2.1 points amid increased AI hardware sales.

Average orders for AI infrastructure totaled $9.3 billion in fiscal 2026, with hyperscale data centers accounting for $4 billion of that total in the fourth quarter.

Cisco projects its revenue for fiscal 2027 to land between $72.2 billion and $73.4 billion, a 6% increase over previous forecasts.