Cisco Shares Soar 24% in Historic Week as $9 Billion AI Target Overlaps with 4,000 Job Cuts

Cisco’s stock posts biggest weekly gain in 25 years after AI orders triple, revenue hits record $15.84B, and a restructuring shifts resources to AI infrastructure.

Cisco Systems has delivered its strongest weekly stock performance in nearly a quarter of a century, with shares jumping 24.06% to close at €101.64 on Friday. The rally reflects a radical shift in perception: a company once seen as a mature networking stalwart is now being repriced as an AI infrastructure play, even as it cuts thousands of jobs.

The restructuring plan will eliminate approximately 4,000 positions — less than 5% of the global workforce — with layoffs expected to begin around May 14. CFO Mark Patterson framed the move as a rapid reallocation of resources rather than a cost-cutting exercise, noting that roughly $450 million of the up to $1 billion in total restructuring charges will hit in the current quarter, with the remainder trickling through by fiscal 2027. The freed-up capital and talent are being redirected toward AI-integrated security, custom silicon, optical networks, and data-center technologies.

The numbers behind the stock's surge are striking. Cisco posted record third-quarter revenue of $15.84 billion, a 12% year-over-year increase that comfortably exceeded the consensus estimate of $15.56 billion. Adjusted earnings per share came in at $1.06, beating analyst expectations of $1.03. On a GAAP basis, net income reached $3.37 billion.

But the headline figures only tell part of the story. The real catalyst lies in the AI order pipeline. During the quarter, Cisco booked $1.9 billion in AI-related infrastructure orders — roughly three times the volume of a year earlier. For the full fiscal year, cumulative AI orders have already reached $5.3 billion, prompting management to raise its target from $5 billion to $9 billion. CEO Chuck Robbins attributed the acceleration to what he calls a "networking supercycle," with hyperscale cloud providers aggressively upgrading their data centers for artificial intelligence workloads.

The broader order book underscores the trend. Product orders jumped 35% year over year, while networking orders surged more than 50%. That kind of demand is reshaping the investment case for a company that for years struggled to reignite growth.

Investors have responded accordingly. The stock is now up 45.99% over the past 30 days, 56.61% year to date, and 76.77% over the last twelve months. The weekly gain was the largest in nearly 25 years, pushing the share price to its highest level of 2026.

Analysts are racing to catch up. HSBC upgraded Cisco from "Hold" to "Buy" and raised its price target from $77 to $137, citing the start of a potential supercycle driven by large cloud customers. KeyBanc set a target of $125, while Rosenblatt Securities is eyeing $150. Institutional buying has also accelerated: Commerzbank FI increased its stake by 49.5% to roughly 2.35 million shares, and Abacus Wealth Partners boosted its position by 232%.

The new guidance bolsters the bullish narrative. For the fourth quarter, Cisco expects revenue between $16.7 billion and $16.9 billion, with adjusted earnings per share in a range of $1.16 to $1.18. For the full fiscal year, the company now projects revenue of approximately $63 billion, up from its earlier, lower forecast.

A quarterly dividend of $0.42 per share has been declared, with the ex-dividend date set for July 6 and payment scheduled for July 22. The next key test for Cisco will be whether the flood of AI orders translates into sustainable revenue growth — and whether the market's newfound faith in the networking veteran can withstand the cost of its own transformation.