Cisco's Q4 Earnings Top Estimates, But 2026 Outlook Disappoints Investors

Cisco Systems reported Q4 revenue of $14.7bn, topping consensus estimates. The company's AI orders exceeded $2bn in FY25, with continued momentum expected in FY26. However, the fiscal 2026 revenue guidance was in-line with consensus, slightly disappointing investors. Shares declined 1.02% to $69.55.

Cisco Systems Inc. (NASDAQ:CSCO) reported Q4 revenue of $14.7 billion, surpassing consensus estimates. The company's AI orders exceeded $2 billion in fiscal year (FY) 2025, with continued momentum expected in FY26. However, the fiscal 2026 revenue guidance was in line with consensus, slightly disappointing investors. Shares declined 1.02% to $69.55 [3].

Cisco's strong finish to FY25 was bolstered by robust sales of AI infrastructure, according to CEO Charles H. Robbins [1]. The company's AI infrastructure segment has become a linchpin of its growth strategy. In Q4 2025, AI infrastructure orders surged to $350 million, bringing the first-half total to $700 million [1]. Cisco now expects $2 billion in AI infrastructure orders for FY2025, more than doubling its initial target [1].

For FY26, Cisco has set an ambitious revenue target of $59 billion to $60 billion, with AI infrastructure expected to be a significant growth driver [1]. The company's full-year revenue guidance of $56.0–$56.5 billion implies a 6–7% growth rate, a modest but stable trajectory in a sector prone to boom-and-bust cycles [2]. The company's diversified customer base and its ability to cross-sell AI infrastructure solutions across its existing portfolio contribute to this predictability.

While the outlook is largely positive, investors should not ignore headwinds such as proposed tariffs and increasing competition in the AI infrastructure market [1]. However, Cisco's ecosystem advantage, which integrates AI infrastructure with its broader security, cloud, and collaboration tools, provides a defensible moat against rivals like Arista Networks and Juniper Networks [1].

For long-term investors, Cisco represents a compelling case study in strategic reinvention. The company's earnings beat and guidance suggest that it is not only keeping pace with demand but also managing costs and capital efficiently. While the stock may not offer the explosive growth of pure-play AI startups, its combination of revenue growth, margin resilience, and shareholder returns makes it a defensive yet opportunistic play in a sector defined by uncertainty.

References:
[1] https://www.ainvest.com/news/cisco-sets-fy26-revenue-target-59b-60b-ai-infrastructure-key-growth-driver-2508/
[2] https://www.morningstar.com/stocks/cisco-earnings-we-raise-our-ai-forecast-after-strong-results-guidance
[3] https://news.alphastreet.com/ciscos-ai-fueled-growth-raises-expectations-for-fy26-can-it-deliver/