Cisco shares surged 17% to a record-high on Thursday, marking their biggest single-day gain in over two decades. According to reports from The Economic Times, the networking gear maker's near-$400 billion market capitalization was set to swell by about $70 billion if the jump is sustained. This represents the best day for the stock since robust earnings reports in May 2002 sparked a furious rally in the aftermath of the dotcom crash. The stock had already gained 32% this year by Wednesday's close, demonstrating strong momentum in the AI infrastructure sector. The latest surge pushed shares to a new intraday record of $119.36, marking the company's biggest gain since August 2011.
Cisco delivered exceptional Q3 FY2026 results on May 13, posting record revenue of $15.84 billion against estimates of $15.56 billion, representing a 10.4% year-over-year earnings jump. The company reported adjusted EPS of $1.06, beating estimates of $1.03. The stock is trading higher by more than 17% in today's session, hitting a new 52-week high above $116. Additionally, Cisco raised its full-year FY26 guidance, lifting revenue outlook to $62.8B-$63.0B from $61.2B-$61.7B and EPS to $4.27-$4.29 from $4.13-$4.17. The Q4 revenue guidance of $16.7B-$16.9B crushed the $15.8B Street estimate. In the fiscal third quarter ended April 25, revenue rose 12% to $15.8 billion, while adjusted profit reached $1.06 a share, ahead of analyst estimates for $15.6 billion in revenue and $1.04 a share in earnings. As per Moby.invest, net income rose to $3.37 billion from $2.49 billion the same quarter a year prior.
Cisco has emerged as a big winner from Big Tech's AI spending spree, thanks to its key role in supplying gear crucial to data center functioning. According to The Economic Times, the firm has taken $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year order expectation to $9 billion from $5 billion previously. The San Jose, California-based company supplies high-speed networking equipment, such as switches and routers, that data centers use to run AI applications. However, the AI networking opportunity is becoming more competitive, with Broadcom (NASDAQ:AVGO), Hewlett Packard Enterprise (NYSE:HPE) and Arista Networks (NYSE:ANET) also pushing for share in the same market. As per Moby.invest, the company's stock is up over 53% since January 1 as the AI infrastructure boom quickly takes over the entire market.
The company announced nearly 4,000 job cuts to redirect investments into technology, with the AI-focused restructuring expected to cost $1 billion. As reported by The Economic Times, CEO Chuck Robbins said the company is reducing roles in some areas while making strategic investments in others, including silicon chips, fiber optics, security and AI tools for employees. The fourth-quarter retrenchments would represent less than 5% of its workforce, with severance and other one-time expenses reaching as much as $1 billion. The move reflects Cisco's attempt to refocus a four-decade-old Silicon Valley business around demand tied to data centers, hyperscalers and the broader AI buildout. According to Moby.invest, the company is cutting 4,000 jobs or about 5% of its workforce as part of this broader pivot to AI.
Cisco CEO Chuck Robbins told CNBC on Thursday that skyrocketing demand for artificial intelligence tools and equipment is powering the industry toward a "networking supercycle." This optimistic outlook reflects the company's confidence in the sustained growth trajectory of AI infrastructure spending. The networking supercycle concept suggests that the current surge in AI-related networking demand could create a prolonged period of exceptional growth for companies like Cisco that supply the underlying infrastructure. The CEO's comments to CNBC on Thursday underscore the company's bullish stance on the AI infrastructure market and its positioning to capitalize on the networking supercycle that is emerging from the AI spending boom.
