Cisco beats first-quarter estimates and lifts yearly sales guidance on AI demand

what happened

Cisco topped Wall Street expectations for its first quarter and raised its full-year revenue outlook. The network-equipment maker is betting that companies building AI infrastructure will keep spending heavily for a long time.

Quarterly revenue came in at $18.5 billion, against an average analyst estimate of $18.14 billion, according to LSEG data. Adjusted earnings were $1.40 per share, compared with forecasts of $1.33. Cisco now expects fiscal 2027 revenue between $74.8 billion and $75.8 billion, up from its earlier range of $72.2 billion to $73.4 billion. The company also lifted its AI infrastructure revenue target from hyperscalers to $9 billion from $7.5 billion. CEO Chuck Robbins called the moment "the very early stages of a multi-year networking supercycle." Shares were roughly flat in volatile extended trading and are up about 32% so far this year.

why it matters

Investors had worried about a possible slowdown in data-center construction after the Democrats' midterm win and about rising borrowing costs. A raised forecast eases some of those concerns. Gross margin fell to 65.6% from 68.1% a year earlier as memory chip shortages pushed up component costs, and that remains a point to watch.

market impact

Cisco shares and AI networking stocks: results above estimates and a higher forecast support the sector

• ▲Cisco shares pressure up — results above estimates and a higher annual revenue forecast support sentiment

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instruments