Cisco Sees Big Opportunities in AI Despite Concerns Over Slowing Core Growth

Cisco CFO Mark Patterson sees big AI opportunities despite concerns about slowing core growth. The company reported Q4 revenue of $14.7 billion, up 8% YoY, and adjusted EPS of $0.99, beating estimates. For FY26, Cisco expects revenue between $59 billion and $60 billion and adjusted EPS of $4.00 to $4.06. Patterson highlighted the growth of AI infrastructure, particularly large-scale AI training systems, and emphasized the need for companies to upgrade networking and security systems to meet AI demands.

Cisco Systems (NASDAQ:CSCO) reported its fourth-quarter fiscal 2025 results on Aug. 13, 2025, showcasing robust financial performance with total revenue of $14.7 billion, up 8% year-over-year (YoY), and non-GAAP earnings per share (EPS) of $0.99, beating estimates [1]. The company's Q4 results represented an earnings surprise of +2.06%, as it surpassed the Zacks Consensus Estimate by $0.02 per share [1].

The company's revenue growth was driven by a 7.6% increase in sales to $14.7 billion, which exceeded the Zacks Consensus Estimate by 0.47% [1]. Key drivers included a significant increase in AI infrastructure orders, reaching a record $800 million in the fourth quarter and over $2 billion for the year, double the original $1 billion target [2]. This growth underscores Cisco's competitive positioning in the evolving infrastructure market.

Cisco's CFO, Mark Patterson, highlighted the company's strategic focus on AI infrastructure, particularly large-scale AI training systems. He emphasized the need for companies to upgrade their networking and security systems to meet the growing demands of AI. Patterson noted that Cisco's AI-related revenue reached $1 billion in fiscal year 2025, reflecting the growing demand for AI solutions [2].

Looking ahead, Cisco provided a cautious outlook for its fiscal year 2026 (FY2026), expecting revenue between $59 billion and $60 billion and adjusted EPS of $4.00 to $4.06 per share [2]. These projections are in line with the average Wall Street estimate of $59.5 billion in revenue [2]. The company's cautious outlook is influenced by current tariffs, which are expected to remain in place until the end of 2026 [2]. However, Patterson noted that Cisco will continue to mitigate the impact of tariffs through its world-class supply-chain team [2].

Cisco's stock performance has been robust, with shares adding about 20.6% since the beginning of the year, compared to the S&P 500's gain of 9.6% [1]. The company's Zacks Rank #2 (Buy) suggests that the stock is expected to outperform the market in the near future, based on earnings estimate revisions [1].

References:
[1] https://www.nasdaq.com/articles/cisco-q4-revenue-jumps-ai-demand
[2] https://www.ainvest.com/news/cisco-q4-earnings-exceed-expectations-conservative-outlook-fy2026-2508/