Cisco revenue outlook beats expectations, successful transition to the AI sector; CSCO stock price hits a new high

Cisco Systems Inc. released its latest financial report and revenue guidance. Cisco is currently in a critical phase of its business transition, with its core strategy shifting from traditional networking hardware to AI infrastructure. By adjusting its workforce structure and resource allocation, the company is aiming to secure a leading position in the fiercely competitive AI market. CSCO shares rose by about 19% in after-hours trading at one point, reaching a new all-time high.

Cisco revenue beat expectations, issuing an optimistic forecast

In its third fiscal quarter ended April 25, Cisco reported revenue of $15.8 billion, up 12% year over year. Earnings Per Share (EPS) excluding certain items was $1.06, exceeding analysts’ expectations. For the fourth fiscal quarter ending in July, Cisco issued an optimistic outlook, expecting revenue in the range of $16.7 billion to $16.9 billion, significantly higher than Bloomberg’s estimate of $15.8 billion. EPS guidance is projected at $1.16 to $1.18. Chief Financial Officer Mark Patterson said the company is strengthening its competitiveness by expanding its Silicon Chips product portfolio and addressing AI-derived cybersecurity risks. These financial figures reflect that Cisco’s core business still has a high degree of resilience while undergoing a technology transition.

Focusing on AI transition strategy and hyperscale data centers

Cisco is concentrating its future growth momentum on building AI infrastructure. CEO Chuck Robbins emphasized that the company is strategically investing in Fiber Optics, network security, and internal enterprise AI applications. The most closely watched metric is that Cisco has raised its FY2026 order target from hyperscalers for hyperscale data centers from $5 billion to $9 billion. This suggests that cloud service providers are accelerating demand for high-performance networking hardware when handling complex AI tasks. To that end, Cisco continues to invest in R&D for new network chips to ensure the stability and observability of AI Agents during operation.

Cisco plans to cut 4,000 employees; shares up 19% after hours

As the company shifts its operational focus toward the AI space, Cisco announced a Restructuring, planning to reduce approximately 4,000 positions, accounting for less than 5% of total employees. Robbins said the move is intended to maintain operational efficiency and focus in the AI era, reallocating funds from mature businesses to areas with high growth potential. The plan is expected to generate about $1 billion in severance pay and related one-time expenses. Although it involves headcount reductions, the move is seen as preparation for strategic investments in the semiconductor and cybersecurity defense fields. The capital markets responded positively to the resource reallocation plan, driving the after-hours share price up by about 19% at one point and setting a new all-time high. This reflects investors’ initial approval of the company’s transition efficiency. Cisco (CSCO) shares are up 33% this year.

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