Cisco AI Revenue Expected to Double by 2026, Says UBS

Cisco Systems expects AI revenue to double in fiscal 2026, driven by strong momentum. The company is the world leader in designing, developing, and marketing Internet network equipment, with a portfolio that includes network equipment, services, and security products. Its revenue is distributed geographically across the Americas, Europe/Middle East/Africa, and Asia/Pacific regions.

Title: Cisco Systems Anticipates AI Revenue to Double in Fiscal 2026

Cisco Systems (CSCO) has reported a strong performance in the fourth quarter of fiscal 2025, with AI infrastructure orders driving significant growth. The company's total revenue for the quarter reached $14.7 billion, up 8% year over year, while non-GAAP EPS grew by 14% to $0.99 [1]. This robust performance was driven by a 7% increase in product orders and a 30% rise in operating cash flow to $14.2 billion [1].

A key highlight of Cisco's results was the surge in AI infrastructure orders, which exceeded $2 billion for the year, more than doubling the original target of $1 billion. This growth was attributed to strong demand from web scale, enterprise, sovereign, and neo-cloud providers, with Cisco positioned through Silicon One, targeted security offerings, and an expanded partnership with NVIDIA [1]. The company expects this momentum to continue, projecting revenue of $59 billion to $60 billion for fiscal year ending July 26, 2026, with non-GAAP EPS of $4.00 to $4.06 [1].

Cisco's security segment also posted notable growth, with security product orders benefiting from the Splunk acquisition and new offerings such as SASE, XDR, HyperShield, and AI Defense. Excluding the U.S. federal segment, security orders achieved double-digit growth in the fourth quarter, with over 750 new customers added [1].

Operating cash flow grew by 30% to $14.2 billion, with $12.4 billion (94% of free cash flow) returned to shareholders through dividends and buybacks. The quarterly dividend was raised for the fourteenth consecutive year, and $14.2 billion remains authorized under the share repurchase program [1].

Looking ahead, Cisco expects revenue of $14.65 billion to $14.85 billion for the first quarter of fiscal year ending July 26, 2026, with non-GAAP gross margin of 67.5%-68.5% and non-GAAP EPS of $0.97 to $0.99 [1]. The company anticipates sustained AI infrastructure demand, with initial sovereign AI order flows ramping by mid to late fiscal 2026. Federal public sector spend is projected to return to growth in fiscal year ending July 26, 2026, following a decline in fiscal year ending July 27, 2025 [1].

References:
[1] https://www.nasdaq.com/articles/cisco-q4-revenue-jumps-ai-demand
[2] https://www.reuters.com/business/cisco-projects-upbeat-quarterly-revenue-ai-fuels-networking-equipment-demand-2025-08-13/
[3] https://www.benzinga.com/markets/equities/25/08/47113561/deere-cisco-systems-and-3-stocks-to-watch-heading-into-thursday