Networking giant Cisco on Wednesday announced solid earnings results that met Wall Street expectations, on the back of solid infrastructure growth driven by AI and cybersecurity.

Despite the good news, Cisco shares fell modestly in midday trading, possibly reflecting reservations about the technology rally at large. Many infrastructure companies have seen an enormous surge in their share prices on the back of AI enthusiasm, despite collapses in other segments such as enterprise software.

Cisco reported 7.6% year-over-year revenue growth for the quarter, which ended on July 26. Net income rose to $2.82 billion, or 71 cents per share, from $2.16 billion, or 54 cents per share, in the same quarter a year ago.

Cisco’s shares last traded at $69.14, down about 1.6% Some of the disappointment might be due to elevated expectations for the AI infrastructure boom, which has recently been built into the shares with a 30% gain since the April “Liberation Day” crash.

Strong Growth in AI, Networking, and Security

For its part, Cisco says it is exceeding AI infrastructure expectations. CEO Chuck Robbins said that AI infrastructure orders in the quarter had reached $800 million, bringing the total for the fiscal year to $2 billion.

Cisco also demonstrated a strong return to growth in networking and cybersecurity. In the fiscal fourth quarter, Cisco generated $7.63 billion in networking revenue, up 12%. Cisco’s booked $1.95 billion in security revenue, up 9%.

“Overall, product orders in Q4 grew 7% year over year with solid growth across all geographies despite a complex environment demonstrating the valuable outcomes we continue to deliver for customers worldwide,” said Robbins.

How Far Will the AI Infra Boom Go?

In the Q&A, Wall St. analysts drilled into questions about the AI infrastructure boom that has fueled enormous enthusiasm on Wall St. There are two big questions that loom: 1) Can the feverish pace of AI infrastructure in 2025 be sustained in 2026? And 2) will all of the promised AI projects in press releases be realized?

Our own premium Cloud Tracker Pro service has forecasted that the AI infrastructure boom is not sustainable, based on the historically high percentage of revenue that large cloud providers are spending on AI.

One analyst question in the Cisco earnings call Q&A targeted announcements about sovereign AI projects, including those in the Middle East, which have been announced by Cisco but not realized as revenue.

“We have not taken any orders from them yet,” said Robbins in response to a question about International sovereign projects, which might be affected by tariffs and chip export restrictions. “We’ve been in the planning phases with them. They’re obviously working through getting the licenses for the GPUs.”

Some analysts also expressed concern that Cisco is still lagging the growth of some major competitors, including its arch nemesis, Arista Networks, which recent upwardly revised its annual growth projection to 25% on the back of AI growth.

“On one hand, Cisco is doing very well in Hyper Scale AI, and should see an Enterprise acceleration from AI inference and Campus Switching,” wrote Rosenblatt analyst Mike Genovese. “On the other hand, the company has a long history of under-growing its secular opportunities due to losing market share to smaller more technically nimble competitors. We are reiterating our Buy rating on Cisco because the secular opportunities are improving. We hope that the cautious FY26 outlook is only due to lingering concerns about the potential for tariffs and weak U.S. Federal spend to make negative impacts.”

The cautious outlook Genovese mentioned was expressed in Cisco’s tame forecast. Cisco set revenue guidance between $59 billion and $60 billion and a non-GAAP EPS forecast ranging from $4.00 to $4.60. That revenue growth expectation represents 5% growth over the trailing twelve months.

There are several areas to watch over the next few quarters. First, Cisco’s partnership with NVIDIA to produce AI infrastructure solutions is in its early stages and has not yet produced meaningful revenue. Second, the impact of tariffs on international trade. Cisco management said there has yet to be a meaningful impact of tariffs, but some analysts are worried that orders have been front-loaded in advance of tariffs that will hit later in the year. Third, investors would be wise to monitor for any deceleration in AI infrastructure capital spending.

Futuriom Take: Cisco’s solid if unspectacular growth demonstrated progress in the company’s recent focus on product integration and sell-through on the back of AI infrastructure demand, but investors are wary of promises in areas such as sovereign AI in light of ongoing questions about International trade.

Cisco

In sum — what to know:

AI infrastructure orders exceed goal: Cisco had set itself the goal of $1 billion in AI infrastructure order in fiscal 2025 and ended up with more than $2 billion.

Big orders in the bag: Cisco landed two orders from webscalers for fiscal 2026 that, all told, total $1 billion each.

Record year ahead: Cisco expects record performance in the coming year, with fiscal 2026 revenues expected to be between $59-$60 billion for the year.

Cisco delivered results at the high end of its guidance for its fiscal fourth quarter of 2025, with revenues up 8% year-over-year to $14.7 billion.

Orders for Cisco’s Q4 were up 7% from the year-ago period, and the company said that it took in more than $800 million in AI infrastructure orders from hyperscaler customers — meaning that AI infra orders totaled more than $2 billion for the year, more than double the company’s target of $1 billion.

Full-year revenues were up 5% from fiscal 2024 to $56.7 billion. Cisco expects its fiscal 2026 revenues to be between $59-$60 billion.

CEO Chuck Robbins said that fiscal 2025 “established a solid foundation as we turn our focus to delivering Cisco’s strongest year yet in fiscal year ’26.”

During the quarterly call with investors, Robbins said that as AI agents begin autonomously performing tasks, “the capacity requirements of the network will be compounded to accommodate both unprecedented levels of network traffic and an increasing threat landscape,” with major network upgrades expected.

Robbins pointed out the $2 billion in AI infrastructure orders from hyperscalers as evidence of Cisco’s “undeniable capability and relevance of our technology for multiple back-end use cases with some of the most technologically advanced customers.”

Robbins said that while public sector orders were down 6% year-over-year after an unusually strong fourth quarter last year, orders from service providers and cloud customers were up 49% compared to the same time in 2024. Demand from telco and cable customers saw orders up more than 20% year-over-year. But webscale orders were a huge driver in the quarter, seeing their fourth consecutive quarter of triple-digit growth.

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Four out of Cisco’s top six webscale customers had order growth in the triple digits, Robbins said, adding that Cisco received two orders from webscale customers that totaled more than $1 billion for networking, security, collaboration and observability in the coming year.

Amid shifting geopolitical footing for the tech sector, Robbins said Cisco will benefit from countries and companies that are committing to domestic investments in the U.S. as part of trade agreements, and said Cisco is seeing “solid demand signals”.

“As more strategic infrastructure and manufacturing is brought onshore to the United States, Cisco is well positioned to help connect and protect these capital-intensive investments at scale,” Robbins said.

In terms of tariff impacts, CFO Mark Patterson commented that while the company has “some clarity on tariffs, we are still operating in a complex environment.” The company is working off the assumption that current tariffs and exemptions — 30% for China, 25% for Mexico and 35% for Canada, with some exceptions for certain component or items — remain in place through the end of its next fiscal year. It will also see a “small impact” from tariffs on materials like copper, steel, and aluminum. Patterson said that Cisco will use “the flexibility and agility we have built into our operations over the last few years” plus the size and scale of its global supply chain to deal with tariff impacts.

Robbins framed Cisco’s AI opportunity across three “distinct but connected pillars: Ai training infrastructure for hyperscalers; AI inference and enterprise clouds; and AI network connectivity as customers use Cisco platforms to “help modernize, secure and automate their network operations to prepare for pervasive deployment of AI agents and applications.”

Robbins added: “As we move towards Agentic AI and the demand for inferencing expands to the enterprise and end-user networking environments, traffic on the network will reach unprecedented levels. Network traffic will not only increase beyond the peaks of current chatbot interaction, but will remain consistently high with agents in constant interaction.”