Cisco reports strong quarter, guides higher on revenue and AI
Cisco Systems reports fiscal fourth-quarter revenue up 18% year on year to $17.3 billion, raises its AI revenue target to $7.5 billion, and guides first-quarter revenue and fiscal 2027 sales above consensus, while analysts note margin pressure.
Shares of Cisco Systems Inc (NASDAQ: CSCO ) tanked in early trading on Thursday after the company reported fiscal fourth-quarter results Here are the key analyst takeaways: Rosenblatt Securities analyst Mike Genovese reaffirmed a Buy rating, while raising the price target from $150 to $165. KeyBanc Capital Markets analyst Brandon Nispel reiterated an Overweight rating, while lifting the price target from $130 to $135. BofA Securities analyst Tal Liani maintained a Buy rating and price target of $150. Check out other analyst stock ratings.
Rosenblatt Securities: Cisco reported strong results "across nearly all products, end-markets, and geographies," Genovese said in a note. 3 billion. AI Infrastructure/Networking propelled the growth, he added. While the company’s gross margin is projected to contract by 200-300 basis points (bps) in the first half of fiscal 2027, due to a mix shift toward networking hardware, operating margins could remain around 35% given operating expense leverage, the analyst stated.
Cisco’s guidance suggests decelerating revenue growth later in fiscal 2027. This "appears conservative, leaving ample room for potential upside in subsequent quarters," he further wrote. 5% higher and earnings more than 4% above consensus estimate, with upside being broad-based, Nispel said. 4% growth at the midpoint, the analyst stated.
5B, the implied underlying growth of ~10% appears strong, but also conservative in the context of 4—5 points of pricing," he further wrote. BofA Securities: Cisco reported revenue growth of 18% year-on-year. That’s above Street expectations of 15%, backed by Networking growth of 28%, Liani said. The outlook of 22% year-on-year revenue growth in the first quarter guidance and 15% in fiscal 2027 were also well above consensus estimates of 13% and 10%, respectively, he added.
"We highlight that ex-Hyperscaler order growth improved sequentially from 19% YoY in 3Q to 25% in 4Q, while orders from the top four Hyperscalers grew 100%+, showing no signs of slowdown across Cloud and non-Cloud," the analyst wrote. 12 at the time of publication on Thursday. Read Also: Cisco Says It's Taking Customers From Rivals. Is Arista's Lead Narrowing?
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