Cisco Hits All-Time High on $9 Billion AI Orders and ‘Networking Supercycle’ — But Cashflow Tells a Different Story

Cisco shares surge to record $118.21 as AI orders nearly double, product bookings jump 35%, but cash flow slips and restructuring signals cautious optimism.

Cisco’s stock stormed to a record $118.21 in New York this week, propelled by a stunning acceleration in artificial intelligence orders and a 35% jump in product bookings. The rally — up nearly 57% since January and almost 40% in the past month alone — has reshaped the narrative around the networking giant, but beneath the headline numbers, the financial picture is more nuanced.

Chief executive Chuck Robbins described the moment as a “networking supercycle,” and the figures back him up. Revenue in the third quarter of fiscal 2026 hit $15.8 billion, a 12% year-on-year increase that comfortably beat expectations. Adjusted earnings per share came in at $1.06. The networking segment, the company’s core, delivered $8.82 billion in sales — a 25% jump. Product orders surged 35% across the board, with public-sector clients up 27% and enterprises adding 18%.

The real driver, however, is the AI infrastructure boom. Management raised its forecast for AI orders from hyperscalers to roughly $9 billion for the current fiscal year, nearly doubling the prior $5 billion guidance. Looking to fiscal 2027, Cisco expects at least $6 billion in direct AI-related revenue. The market’s reaction was immediate: HSBC lifted its rating from Hold to Buy with a $137 price target, Piper Sandler set $132, and JPMorgan called $120. The consensus analyst target of $114.55 has already been breached, signaling that Wall Street is playing catch-up.

Yet for all the revenue momentum, the cashflow statement tells a more measured story. Operating cash flow slipped to $3.757 billion from $4.057 billion a year earlier. Free cash flow fell to $3.343 billion, and the free cash flow margin contracted from 26.8% to 21.1%. Cisco is investing heavily to capture the AI opportunity, and the cost of that pivot is visible.

At the same time, the company is cutting roughly 4,000 positions — less than 5% of its workforce — as part of a restructuring that could cost up to $1 billion. The bulk of those charges will hit the current quarter. The freed resources are being redirected into cybersecurity and custom silicon, areas Robbins sees as essential to the supercycle thesis. For the full fiscal year, Cisco now targets revenue of $62.8 billion to $63.0 billion, with the fourth quarter alone pegged at $16.7 billion to $16.9 billion — above earlier market expectations.

Technically, the stock is running hot. The relative strength index sits at 76, deep in overbought territory, and the share price trades roughly 38% above its 50-day moving average. Analysts caution that a near-term consolidation is possible, though they stop short of calling the broader trend into question. The German listing closed at €101.64 on Friday, marking a new yearly high and a weekly gain of over 21%.

The next test will come when Cisco reports fourth-quarter results. Investors will focus on whether the AI order flow converts into the hard cash needed to justify a valuation that has already outpaced analyst targets. For now, the networking supercycle is the story — but the cashflow and the layoffs are the subtext.