Key Highlights
- Cisco shares rallied approximately 13.5% following fiscal third-quarter earnings that exceeded projections, posting revenue of $15.84 billion — an 11.9% year-over-year increase
- The company reported $1.9 billion in AI-related orders during the quarter, prompting an upward revision of full-year AI order expectations to $9 billion from $5 billion
- Five additional hyperscaler design wins were announced, marking initial deployments of Cisco’s Silicon One P200 proprietary chip technology
- Fourth-quarter revenue projections of $16.7–$16.9 billion significantly surpassed Wall Street’s $15.82 billion consensus forecast
- Rosenblatt’s Mike Genovese elevated his price objective to a market-leading $150, suggesting approximately 30% potential appreciation
Cisco (CSCO) shares reached a fresh 52-week peak of $117.70 during Thursday’s trading session, climbing as high as 14.6% following the release of fiscal third-quarter financial results that exceeded both revenue and earnings projections while providing forward guidance that substantially outpaced Wall Street expectations.
Quarterly revenue totaled $15.84 billion, representing an 11.9% year-over-year advance and approximately $280 million above analyst consensus estimates. Adjusted earnings per share of $1.06 surpassed forecasts by $0.02.
However, the company’s artificial intelligence performance stole the spotlight.
AI-focused orders for the period reached $1.9 billion — over three times the $600 million recorded during the comparable quarter last year. This elevates the year-to-date cumulative total to $5.3 billion.
Company leadership increased its full-year fiscal 2026 AI order projection from $5 billion to $9 billion. To put this in perspective, that figure represents 4.5 times the total Cisco recorded throughout the entirety of fiscal 2025. Additionally, the firm raised its fiscal 2026 hyperscaler AI revenue target from $3 billion to $4 billion, with indications it could potentially achieve $6 billion in fiscal 2027.
Chief Executive Officer Chuck Robbins disclosed five new hyperscaler design victories during the quarter, encompassing the initial deployments of Cisco’s Silicon One P200 chip within scale-across data center architectures.
Strong Networking Performance and Hyperscaler Momentum Fuel Growth
Networking segment revenue reached $8.8 billion, climbing 25% compared to the prior-year period. Service Provider and Cloud orders skyrocketed 105% year-over-year, with triple-digit expansion across all five of Cisco’s major hyperscaler client relationships.
Enterprise campus infrastructure demand also strengthened, as organizations enhanced their infrastructure to support inference computing, AI agents, and enhanced security implementations.
Regarding profitability metrics, gross margins contracted 150 basis points sequentially to 66%. This decline aligned with company projections and was attributed to elevated component costs, which management indicated have now plateaued.
Fourth-Quarter Outlook and Analyst Response
Cisco projected fourth-quarter revenue in the range of $16.7 billion to $16.9 billion — substantially exceeding the Street’s $15.82 billion consensus estimate. Adjusted EPS guidance of $1.16–$1.18 similarly topped the analyst consensus of $1.07.
Mike Genovese from Rosenblatt, who ranks among the top 1% of Wall Street analysts, increased his price target on CSCO from $100 to $150 — establishing a new Street-high benchmark — while maintaining a Buy rating. This target suggests approximately 30% upside potential from current trading levels over the coming 12 months.
Genovese observed that following two successive quarters of double-digit revenue expansion, Cisco now “seems likely” to sustain double-digit growth rates. He also highlighted that the company possesses “other levers” to maintain operating margins above 34% even if component costs continue rising.
The broader Wall Street consensus price target stands at $124.54, implying approximately 8% upside potential. The overall analyst rating is Moderate Buy, comprised of 11 Buy recommendations and 6 Hold ratings.
CSCO has advanced 54.8% year-to-date entering Thursday’s trading. Investors who allocated $1,000 to the stock five years ago would currently hold approximately $2,225 in value.
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