Cisco Systems (CSCO) is preparing to unveil its first-quarter fiscal 2027 earnings on November 12, 2026. The company anticipates revenues between $18 billion and $18.2 billion, with non-GAAP earnings projected at $1.32 to $1.34 per share. Analysts expect revenues of $18.09 billion, indicating a 21.54% year-over-year growth, and earnings of $1.33 per share, reflecting a 33% increase from the previous year. Cisco has consistently surpassed earnings estimates over the past four quarters, with an average beat of 2.55%.
Key drivers for Cisco's performance include strong demand for AI infrastructure, hyperscaler investments, and enterprise network modernization. The company secured $4 billion in hyperscaler AI infrastructure orders in the fourth quarter of fiscal 2026, bringing the full-year total to $9.3 billion. Enterprise networking demand, particularly in data center and campus networking, has also been robust, with orders increasing by over 35% and 20%, respectively. The security business is expected to benefit from rising cybersecurity spending and the adoption of integrated security solutions.
However, Cisco faces challenges from rising memory costs and a higher mix of lower-margin hardware revenues, which could impact gross margins. The company also competes with Arista Networks, Dell Technologies, and Hewlett Packard Enterprise in AI networking and enterprise security. Despite these pressures, Cisco's shares have appreciated 28.1% year to date, outperforming the Zacks Computer & Technology sector's return of 4.1%. The stock's forward 12-month price/sales ratio stands at 5.3X, higher than the sector's 4.84X but lower than Arista Networks' 13.43X.
Cisco's long-term prospects remain promising, driven by its diversified portfolio and rising AI infrastructure demand. The company expects AI infrastructure revenues from hyperscalers to reach $7.5 billion in fiscal 2027. The integration of Splunk with Cisco's security portfolio and the adoption of solutions like Hypershield and AI Defense are expected to support growth. Management anticipates high-single-digit revenue growth in security and observability for fiscal 2027. Cisco currently carries a Zacks Rank #2 (Buy).