Quick Summary
- Shares of Cisco climbed approximately 13.5% following fiscal third-quarter earnings that exceeded projections, posting revenue of $15.84 billionâan 11.9% increase from the prior year
- The networking giant reported $1.9 billion in AI-related orders for the quarter and boosted its full-year AI order forecast to $9 billion, up from a previous $5 billion target
- The company announced five additional hyperscaler design victories, marking the initial commercial rollout of its Silicon One P200 chip technology
- Fourth-quarter revenue projections of $16.7â$16.9 billion significantly exceeded Wall Street’s consensus estimate of $15.82 billion
- Rosenblatt’s top-ranked analyst Mike Genovese lifted his price objective to a Wall Street-leading $150, suggesting approximately 30% potential appreciation
Shares of Cisco (CSCO) reached a fresh 52-week peak of $117.70 during Thursday’s trading session, surging as much as 14.6% after the networking equipment manufacturer delivered fiscal third-quarter performance that exceeded both revenue and earnings projections while issuing forward guidance that substantially topped analyst estimates.
The company’s quarterly revenue totaled $15.84 billion, representing an 11.9% year-over-year expansion and landing approximately $280 million above Wall Street’s consensus forecast. Adjusted earnings per share came in at $1.06, beating expectations by two cents.
However, the more compelling narrative centered around artificial intelligence momentum.
AI-related orders during the quarter climbed to $1.9 billionâexceeding the $600 million recorded in the comparable year-ago period by more than threefold. The cumulative year-to-date AI order total now stands at $5.3 billion.
Executive leadership increased the company’s full fiscal year 2026 AI order projection from $5 billion to $9 billion. To put this in perspective, that figure represents 4.5 times the total AI orders Cisco captured throughout the entirety of fiscal 2025. Additionally, the company elevated its FY26 hyperscaler AI revenue forecast from $3 billion to $4 billion, while indicating potential for $6 billion in FY27.
CEO Chuck Robbins disclosed five additional hyperscaler design victories secured during the quarter, which included the inaugural production deployments of Cisco’s proprietary Silicon One P200 chip in scale-across data centre architectures.
Robust Networking Segment and Hyperscaler Momentum Power Growth
The networking division generated $8.8 billion in revenue, marking a 25% year-over-year increase. Orders from Service Provider and Cloud customers exploded 105% compared to the prior year, with triple-digit expansion recorded across all five of Cisco’s major hyperscaler client relationships.
Demand from enterprise campus customers also strengthened, as organizations expanded their infrastructure capabilities to support inference computing workloads, AI agents, and advanced security deployments.
Regarding profitability metrics, gross margins contracted 150 basis points sequentially to 66%. This decline aligned with company expectations and reflected elevated component costs, which management indicated have now reached stability.
Forward Outlook and Analyst Response
For the fourth quarter, Cisco projected revenue ranging from $16.7 billion to $16.9 billionâconsiderably above Wall Street’s $15.82 billion consensus estimate. The company’s adjusted EPS guidance of $1.16â$1.18 similarly exceeded the Street’s $1.07 forecast.
Mike Genovese of Rosenblatt Securities, who ranks among the top 1% of Wall Street analysts, elevated his price target on CSCO stock from $100 to $150âestablishing a new Wall Street highâwhile maintaining his Buy recommendation. This target implies roughly 30% upside potential over the coming twelve months.
Genovese highlighted that following two consecutive quarters of double-digit revenue expansion, Cisco now “seems likely” to sustain double-digit growth rates. He further emphasized the company possesses “other levers” to maintain operating margins above 34% even amid potential input cost increases.
The broader Wall Street consensus price target currently stands at $124.54, implying approximately 8% upside. The overall analyst rating reflects a Moderate Buy, comprised of 11 Buy ratings and 6 Hold ratings.
CSCO shares have climbed 54.8% year-to-date entering Thursday’s trading. Investors who allocated $1,000 to the stock five years ago would currently hold a position valued at approximately $2,225.
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