Key Takeaways
- Cisco shares rallied approximately 13.5% following fiscal third-quarter earnings that exceeded projections, posting revenue of $15.84 billion—an 11.9% year-over-year increase
- Artificial intelligence orders reached $1.9 billion during the quarter, prompting management to boost full-year AI order projections to $9 billion from an earlier $5 billion estimate
- The networking giant announced five additional hyperscaler design wins, marking the initial rollout of its Silicon One P200 proprietary chip
- Fourth-quarter revenue projections of $16.7–$16.9 billion significantly surpassed Wall Street’s $15.82 billion consensus estimate
- Rosenblatt’s Mike Genovese elevated his price objective to a Street-leading $150, suggesting approximately 30% potential upside
Cisco (CSCO) stock reached a fresh 52-week peak of $117.70 during Thursday’s trading session, surging as much as 14.6% following the technology company’s fiscal third-quarter financial report that exceeded expectations across key metrics while providing forward guidance substantially above analyst predictions.
The company reported quarterly revenue of $15.84 billion, representing an 11.9% year-over-year expansion and exceeding consensus forecasts by approximately $280 million. Adjusted earnings per share reached $1.06, surpassing analyst estimates by $0.02.
However, the standout narrative centered on artificial intelligence momentum.
AI-related orders for the three-month period totaled $1.9 billion—representing more than a threefold increase from the $600 million recorded during the comparable period one year earlier. This performance brings the fiscal year-to-date AI order total to $5.3 billion.
Executive leadership increased its full-year fiscal 2026 AI order projection from $5 billion to $9 billion. To put this in perspective, that figure represents 4.5 times the amount Cisco generated throughout all of fiscal 2025. The technology firm also elevated its FY26 hyperscaler AI revenue expectation from $3 billion to $4 billion, with indications pointing toward a potential $6 billion target in FY27.
Chief Executive Officer Chuck Robbins disclosed five additional hyperscaler design victories during the quarter, which included initial deployments of Cisco’s Silicon One P200 chip within scale-across data center architectures.
Networking Segment and Hyperscaler Activity Fuel Performance
The networking division generated $8.8 billion in revenue, marking a 25% year-over-year expansion. Service Provider and Cloud orders experienced a 105% year-over-year surge, with triple-digit percentage growth recorded across all five of Cisco’s major hyperscaler clients.
Enterprise campus activity also strengthened as organizations invested in infrastructure supporting inference workloads, AI agents, and enhanced security implementations.
Regarding profitability metrics, gross margins contracted 150 basis points sequentially to 66%. This decline aligned with management expectations and resulted from elevated component expenses, which executives indicated have now reached a stabilization point.
Fourth-Quarter Projections and Analyst Response
Cisco projected fourth-quarter revenue in the range of $16.7 billion to $16.9 billion—substantially exceeding Wall Street’s $15.82 billion consensus. The company’s non-GAAP EPS guidance of $1.16–$1.18 similarly topped the analyst consensus of $1.07.
Mike Genovese from Rosenblatt, who ranks among the top 1% of Wall Street analysts, increased his CSCO price objective from $100 to $150—establishing a new Street-high target—while maintaining his Buy recommendation. This valuation suggests roughly 30% appreciation potential from current trading levels over the coming twelve months.
Genovese observed that following two consecutive quarters of double-digit revenue expansion, Cisco now “seems likely” to establish itself as a double-digit growth enterprise. He additionally highlighted that the company possesses “other levers” to maintain operating margins exceeding 34% even if input costs experience upward pressure.
The broader analyst community’s average price target stands at $124.54, implying approximately 8% upside potential. The overall analyst rating reflects a Moderate Buy consensus, comprising 11 Buy ratings and 6 Hold ratings.
CSCO shares have appreciated 54.8% year-to-date entering Thursday’s trading. Investors who allocated $1,000 to the stock five years ago would currently hold a position valued at approximately $2,225.
