Cisco's AI Networking Business Fuels Dividend Growth

Cisco (NASDAQ:CSCO) is an attractive dividend play for investors looking to add to their portfolios before October. The company's AI networking business continues to grow rapidly, with revenue reaching $63.33 billion in fiscal 2026, a year-over-year increase of 11.77%. This growth is driven by the increasing demand for AI infrastructure, with orders rising 40% in Q4 and hitting $9.3 billion for the year.

The company's dividend streak remains intact, with Cisco raising its payout for the 15th consecutive year in fiscal 2026. The quarterly dividend has climbed from 6 cents in 2011 to 42 cents, making it an attractive option for income investors. The company's solid financials, including operating cash flow of $14.177 billion and total capital returned of $12.7 billion, support the raise streak.

Despite some concerns about margins contracting and AI orders rolling over, the author remains bullish on Cisco's prospects. With management guiding fiscal 2027 non-GAAP EPS to $5.05 to $5.11, up from $4.33, the company is poised for continued growth. The author plans to add to their position before the October record date locks in the next quarterly dividend.