Cisco's Q1 Earnings Exceed Expectations: AI Infrastructure Revenue Expected to Double This Fiscal Year

Key Points

• Cisco's Q1 earnings exceeded market expectations.

• The computer networking equipment company is working to enhance its market position in the artificial intelligence sector after missing early opportunities in the AI industry's boom.

• Cisco's stock has risen 35% this year, significantly outperforming the Nasdaq index, which has increased by about 9% during the same period.

In after-hours trading on Thursday, networking equipment manufacturer Cisco reported better-than-expected Q1 earnings.

Here is a comparison of Cisco's actual performance against the consensus expectations from the London Stock Exchange Group (LSEG):

• Earnings Per Share (EPS): Adjusted at $1.40, compared to market expectations of $1.33.

• Revenue: $18.5 billion, against market expectations of $18.1 billion.

Cisco stated in a release that its revenue grew 24% year-over-year, increasing from $14.88 billion in the same quarter last year to $18.5 billion.

Net income rose to $4.6 billion, or $1.14 per share; last year's net income was $2.9 billion, or $0.72 per share.

After previously missing early opportunities in the generative AI boom, Cisco is now striving to establish itself in the wave of AI infrastructure development.

As of Thursday's close, Cisco's stock price has increased by about 35% this year, significantly outperforming the Nasdaq index, which rose by 9% during the same period.

Cisco has raised its forecast for AI infrastructure revenue from hyperscale cloud service providers for this fiscal year, expecting it to reach $9 billion, more than double that of fiscal year 2026.

Cisco CEO Chuck Robbins stated in the release:

"In the era of Agentic AI, organizations of all types are choosing Cisco because we have trusted technology that can define market standards, along with the expertise to help them scale, secure, and optimize their operational environments."

For Q2, Cisco indicated that it expects revenue to be between $18 billion and $18.2 billion.

According to LSEG data, this forecast is above the average analyst estimate of $17.88 billion.

The company expects adjusted EPS for Q2 to be between $1.34 and $1.36, also higher than the average analyst expectation of $1.23.