Cisco Surges on Record-Breaking Q4 Results, Eyes $7.5 Billion in AI Revenue

Cisco Systems reported strong Q4 FY2026 results, with an 18% sequential revenue increase and a 23% rise in non-GAAP EPS. The company achieved $9.3 billion in AI infrastructure orders for the full year and expects $7.5 billion in AI revenue for FY2027.

The growth was driven by a surge in AI infrastructure demand, with $4 billion in AI orders in Q4 alone. However, despite the strong results, the stock fell due to concerns over declining gross margins, which dropped to 66.3% and are forecasted at 65-66% for Q1 FY2027.

Cisco's CEO Chuck Robbins highlighted the company's strong performance, describing AI infrastructure as a long-term growth driver. The analyst maintains a Buy rating on Cisco, citing the company's AI-driven growth, strong cash flow, and shareholder returns as outweighing short-term margin pressures.