Huawei Trial Weighs on Cisco as AI Growth Drives Earnings

Cisco Systems (CSCO) saw its stock price dip by approximately 0.5% to $108.865 on Thursday as Huawei's federal criminal trial began in Brooklyn.

Prosecutors accuse Huawei of conspiring to steal trade secrets from five U.S. businesses, including source code for Cisco's router operating system.

The case involves more than just intellectual property; prosecutors also allege sanctions and financial-system violations tied to Iran, while Huawei denies the charges and claims they are legitimate business conduct or isolated employee behavior.

Cisco is not a party in the lawsuit, and investors have no disclosed financial recovery to price into the shares.

However, Cisco's AI pipeline remains its main earnings engine. The company has booked $9.3 billion of fiscal 2026 AI orders, accounting for about 14.7% of its $63.33 billion in annual revenue, and expects AI revenue to climb from approximately $4 billion to $7.5 billion in fiscal 2027.