Cisco Systems, the world’s largest maker of networking hardware powering the internet, issued a lukewarm revenue forecast for its fiscal year ending July 2026, dampening investor enthusiasm despite strong AI-related sales.
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| Cisco Issues Lukewarm FY2026 |
The company expects revenue between $59 billion and $60 billion, aligning with the Wall Street consensus of $59.5 billion but falling short of some analysts’ more optimistic projections above $61 billion.
AI Sales Hit $1.3B but Outlook Disappoints
Cisco reported that AI-related revenues have already reached $1.3 billion in the first three quarters of the fiscal year, exceeding earlier projections. Demand has been particularly strong in secure networking and AI training infrastructure partnerships.
However, analysts and investors had hoped the AI boom would trigger a more aggressive revenue forecast for FY2026, especially given major data center expansions and increasing enterprise AI adoption.
Earnings Guidance
For FY2025, Cisco expects:
Non-GAAP EPS: $3.77–$3.79
GAAP EPS: $2.53–$2.58
Earlier in 2025, the company raised its annual revenue expectations on the back of steady cloud customer demand fueled by AI infrastructure investments.
Balancing Growth and Expectations
While Cisco continues to see strong momentum in AI, cloud, and cybersecurity, the cautious guidance signals management’s conservative stance amid global economic uncertainties and competitive market pressures.
Investors reacted coolly, focusing on the gap between Cisco’s current forecast and the more bullish AI-driven growth narrative that’s dominated tech in 2025.
FAQ's
Q1: What is Cisco’s revenue forecast for FY2026?
A: Cisco projects $59–$60 billion in revenue, in line with analyst consensus but below some high-end expectations above $61 billion.
Q2: How much AI-related revenue has Cisco generated?
A: Cisco has reported $1.3 billion in AI-related revenue through the first three quarters of the current fiscal year.
Q3: Why are investors disappointed despite strong AI sales?
A: While AI sales beat internal forecasts, the company’s overall revenue guidance did not show the aggressive growth many anticipated from the AI boom.
Q4: What are Cisco’s EPS expectations?
A: Cisco expects non-GAAP EPS between $3.77–$3.79 and GAAP EPS between $2.53–$2.58 for FY2025.
Q5: What are Cisco’s growth areas for 2025–2026?
A: The main drivers are secure networking, AI training infrastructure, cloud solutions, and cybersecurity.
