Cisco’s Network Supercycle Takes Shape: AI Orders Hit $1.9 Billion, Analysts Race to $150

Cisco reports 12% revenue growth and $1.9B in AI orders. Shares hit 52-week high as analysts upgrade targets, citing a networking supercycle and $43B backlog.

For years, Cisco was the steady hand in enterprise networking — reliable, cash-rich, but hardly a growth story. That narrative has flipped. The AI infrastructure boom is reshaping the company from the inside out, and the numbers from its fiscal third quarter show just how fast the transformation is moving.

Shares surged more than 24% over the past week, touching €101.64 on Friday — a fresh 52-week high and a gain of roughly 56% since the start of the year. The catalyst was a quarterly report that blew past expectations: revenue climbed 12% to $15.84 billion, while adjusted earnings per share landed at $1.06, comfortably ahead of consensus. Product orders jumped 35% year over year, with the networking business specifically logging a 50% increase. In dollar terms, Cisco collected $1.9 billion worth of AI-related orders in the quarter alone.

Analysts responded with a flurry of target upgrades. HSBC lifted its price objective to $137 from $77 and upgraded the stock to a Buy. Rosenblatt went further, setting a new target of $150, arguing that Cisco’s role in the AI supply chain is now structurally embedded. Morgan Stanley noted that all five major hyperscalers boosted their AI-related orders by triple-digit percentages, and Cisco secured five new design wins in the quarter. The company’s total backlog swelled past $43 billion, giving management unusual visibility into the quarters ahead.

CEO Chuck Robbins described the moment as a “networking supercycle” and has been repositioning the company to capture it aggressively. That means cutting roughly 4,000 jobs — about 5% of the global workforce — and redirecting capital and headcount toward AI, optics, and cybersecurity. The restructuring will cost Cisco up to $1 billion, but Robbins insists the move is about investment, not cost reduction.

The pivot is already flowing through the guidance. Management now expects AI infrastructure orders to reach $9 billion for fiscal 2026, up from a prior forecast, and set a revenue target of $62.8 billion to $63.0 billion for the full year. For fiscal 2027, the board is eyeing at least $6 billion in revenue from AI hyperscaler customers alone.

Institutional investors have taken notice. The Commerzbank FI unit boosted its stake by nearly 50% last quarter, and overall institutional ownership now stands above 73%. A quarterly dividend of $0.42 per share provides a floor under the stock, even as the price-to-earnings ratio has expanded to 37 — a level that suggests much of the good news is already baked in.

Insiders, meanwhile, have been selling. Several board members trimmed significant positions during the spring, a signal that some are locking in gains after such a steep run. The stock now trades 55% above its 200-day moving average, a technical measure that underscores the momentum but also raises the risk of a sharp pullback if hyperscaler spending slows. For now, all eyes are on the current quarter: if AI orders hold above $3 billion, the rally has room to run. If they slip, the valuation correction could be swift.