Cisco Systems shares jumped 17.2% to $119.36 on Thursday, 14 May, reaching a fresh all-time high and marking the stock's fifth consecutive day of gains. According to reports from LiveMint, this surge has lifted the stock's cumulative rise to nearly 30% and put it on track for its biggest single-day jump in more than two decades. The rally has boosted the Dow Jones Industrial Average, putting the index on track to reclaim the 50,000 level it first touched earlier this year. As per Yahoo Finance, the stock's market cap sits near $402.4 billion heading into the session, with today's gap higher positioning Cisco to extend its lead over networking peers. The jump, if sustained, would mark the best day for the stock since a robust earnings report in May 2002 sparked a furious rally in the aftermath of the dotcom crash.
The networking giant reported record quarterly revenue of $15.84 billion for the quarter ended April, representing a 12% year-over-year increase. As reported by LiveMint, net income rose to $3.37 billion from $2.49 billion a year earlier, while revenue from the networking segment stood at $8.82 billion. According to Yahoo Finance, adjusted earnings increased 10% to $1.06 per diluted share versus the $1.04 consensus, marking Cisco's fourth consecutive EPS beat. The Street consensus had pointed to earnings near $1.04 per share on sales of roughly $15.5 billion, making this a clean beat-and-raise report. CEO Chuck Robbins stated that the company witnessed "very strong, broad-based demand for our products," with the results exceeding analysts' expectations and driving significant investor optimism. The stock had gained 32% this year by Wednesday's close, with the May gains reaching around 30%.
Cisco has emerged as a major beneficiary of Big Tech's AI spending boom, securing $5.3 billion in artificial intelligence infrastructure orders from hyperscalers so far this fiscal year. According to LiveMint, the company has raised its full-year expectations for such orders to $9 billion, up from the earlier projection of $5 billion. Hyperscalers including Meta Platforms, Amazon, Google, and Microsoft are collectively spending hundreds of billions of dollars to expand their AI infrastructure, with Cisco supplying critical networking equipment essential for data center operations. As per Yahoo Finance, product orders jumped 35% year-over-year, setting Cisco up with a strong order book to convert into revenues over the next couple of years. CEO Charles Robbins confirmed on the earnings call that hyperscaler orders rose by a triple-digit percentage, with management citing heavy demand for AI data center infrastructure as the main growth driver. The company supplies high-speed networking equipment, such as switches and routers, that data centers use to run AI, with analysts at Melius Research noting that "this networking momentum can continue as this space has a clear secular tailwind from AI inference."
The company expects fourth-quarter revenue in the range of $16.7 billion to $16.9 billion, higher than the guidance range of $16.2 billion to $16.7 billion issued in February. As reported by LiveMint, this represents an increase from previous expectations, driven by the surge in AI infrastructure demand. According to Yahoo Finance, Cisco lifted FY2026 revenue guidance to $62.8 billion to $63 billion, with management setting full-year and next-quarter guidance targets approximately $1 billion above the consensus and earnings targets racing 10% ahead of existing analyst targets. The company announced an AI-focused restructuring expected to cost $1 billion, which will shift investments toward AI and related growth avenues. Despite announcing around 4,000 job cuts as part of a restructuring effort, representing less than 5% of its workforce, the company is strategically investing in silicon, optics, security as well as employees' use of AI across-company while reducing roles in some areas. Management also announced plans to cut nearly 4,000 jobs, framed as a reallocation toward areas "where demand and long-term value creation are strongest" to remain competitive in the AI market.
The stock's year-to-date return has climbed sharply to 52%, with the May gains reaching around 30%. According to LiveMint, Cisco's rally reflects the broader AI infrastructure spending trend, with the company's networking equipment essential for powering AI systems and data centers. As per Yahoo Finance, Hewlett Packard Enterprise stock is up 34% YTD, narrowly ahead of Cisco's 32% YTD gain, while Arista Networks is a comparative laggard as it's up 7% YTD. The competitive landscape has been reframed with Cisco's decisive AI infrastructure order acceleration challenging Arista's position as the premier AI networking pure-play. The company has also unveiled new switches designed to connect different types of quantum computers, advancing its push toward quantum computing networks in line with similar efforts by peers such as Alphabet's Google and IBM. Analysts at Melius Research noted that "Cisco feels a lot like Intel here, as the puck has gone to where CEO Chuck Robbins invested - rewarding the company for its custom silicon and optics." Despite the strong performance, Stock Advisor analysts note that Cisco trades at a significant discount to networking peers like Ciena (68x forward) and Nokia (32x forward) at a forward P/E of roughly 27x based on the new FY2026 guidance, positioning it as the reasonably priced option for AI infrastructure exposure.
