Cisco Forecasts Record Revenue Driven by AI Demand

Cisco Systems Inc. forecast fiscal 2027 annual revenue between $72.2 billion and $73.4 billion, significantly exceeding the Wall Street average estimate of $68.69 billion. The company attributed this growth to sustained demand for artificial intelligence networking gear from enterprises and hyperscale cloud providers, specifically citing success in capturing a larger share of the AI data center market.

For the fourth quarter ended July 25, revenue grew approximately 18 percent to $17.3 billion, beating estimates of $16.82 billion. Looking ahead, the company projected first-quarter revenue between $18 billion and $18.2 billion, again surpassing analyst expectations of $16.8 billion. Cisco expects $7.5 billion in revenue from hyperscaler AI infrastructure orders in fiscal 2027, following $9.3 billion in such orders for fiscal 2026.

This growth follows a strategic reorganization focused on the AI sector, which involved job cuts and an estimated $1 billion in severance costs. The company is also expanding its Silicon One networking chip line to capitalize on product shortages from competitor Broadcom Inc. Despite the strong forecasts, shares fell over 4 percent in extended trading after an initial rise, as investors reacted to first-quarter adjusted gross margin projections of 65 to 66 percent, which fell slightly below market estimates of 66.1 percent.