Cisco's AI and Software Push Fuel 0.45 Stock Rise with $1.13B Volume Surge as Recurring Revenue Hits $31.1B

Cisco Systems (CSCO) saw a 0.45% rise on August 22, with a trading volume of $1.13 billion, a 36.02% increase from the previous day. The stock’s performance reflects growing investor confidence in its strategic shift toward AI infrastructure and software-driven revenue streams. Recent earnings highlighted a $14.67 billion quarterly revenue, up 7.6% year-over-year, and a $0.99 earnings-per-share result, exceeding analyst expectations.

The company’s integration of Splunk has accelerated its transition to a high-margin software and recurring revenue model, with annual recurring revenue now reaching $31.1 billion. This shift is supported by a 54% subscription revenue mix, reducing reliance on cyclical hardware sales. Splunk’s collaboration with Cisco’s sales force has driven a 14% year-over-year increase in new customer acquisitions, strengthening its position in cybersecurity and observability markets.

Cisco’s AI infrastructure business remains a key growth driver, with $2 billion in orders secured in fiscal 2025—double its initial target. The demand for high-performance networking solutions, such as 800G Ethernet technology and Nexus switches, is expanding beyond cloud giants into sovereign AI initiatives and emerging cloud providers. This diversification underpins a long-term revenue stream and validates Cisco’s role in the AI revolution.

Meanwhile, a multi-year upgrade cycle in enterprise and campus networking is gaining momentum, driven by the launch of Catalyst 9000 smart switches. The need for AI-ready internal networks is pushing customers to modernize infrastructure, creating a steady revenue source for Cisco. Combined with a 2.4% dividend yield and a debt-to-equity ratio of 0.49, the company’s financial stability enhances its appeal to income-focused investors.

The backtest results for a strategy buying the top 500 high-volume stocks from 2022 to present showed a compound annual growth rate (CAGR) of 6.98%. However, the approach experienced a 15.59% maximum drawdown, emphasizing the need for risk management in volume-driven trading strategies.