Cisco Stock Price May Be Based on Future Orders
Cisco Systems, Inc. (CSCO) has seen its revenue growth lag behind that of its peers in recent years, yet it trades on a similar earnings multiple to Dell Technologies, which experienced rapid growth.
The company's operating margin is significantly higher than Dell's, but the slower revenue growth does not entirely explain Cisco's stock price. Cisco's last quarter saw an 18% growth rate, exceeding its 11.8% twelve-month figure.
Cisco's growth in AI networking orders has been substantial, with $9.3 billion of such orders taken from hyperscalers in fiscal 2026, about 4.5 times its fiscal 2025 total. However, revenue from these orders has lagged behind, with the CFO stating that AI infrastructure revenue from hyperscalers was about $4 billion in fiscal 2026.
The company guides fiscal 2027 revenue to between $72.2 billion and $73.4 billion, up from $63.3 billion in fiscal 2026, with expectations of AI infrastructure revenue reaching $7.5 billion within that guidance.