Cisco posts a record $18.5 billion quarter and raises its full-year forecast after the bell, lifting its AI revenue goal from cloud giants to $9 billion

On a day when the AI trade was consumed by Nvidia's leadership crisis, Cisco reminded investors that the spending behind it has not slowed. The networking company reported its biggest quarter ever after Thursday's close and raised its outlook for the full year, citing demand from businesses building out artificial intelligence.

The numbers

For the fiscal first quarter, which ended Oct. 24, Cisco reported revenue of $18.5 billion, up 24% from a year earlier and a company record. Adjusted earnings came to $1.40 a share, up 40%, and earnings under standard accounting rules were $1.14 a share, up 58%. Cisco called it the strongest revenue and adjusted earnings growth in more than 15 years.

Wall Street had looked for less. Investing.com said analysts expected adjusted earnings of $1.32 a share on revenue of $18.11 billion.

The growth came from hardware. Product revenue rose 32%, while services revenue edged up 1%. Within products, networking jumped 43%, security grew 7%, collaboration 8% and observability 2%. Every region grew by double digits: the Americas rose 28%, Europe, the Middle East and Africa 18%, and Asia-Pacific, Japan and China 21%. Cisco's adjusted operating margin hit a record 37.8%.

A bigger AI number

The figure most likely to get attention is Cisco's AI forecast. The company now expects $9 billion of AI infrastructure revenue from hyperscalers, the giant cloud operators, in fiscal 2027, more than double its total for fiscal 2026.

"We are in the very early stages of a multi-year networking supercycle, and we're confident in our ability to continue capturing the multi-billion-dollar opportunity it represents for Cisco." - Chuck Robbins, chair and CEO of Cisco

Robbins said organizations are turning to Cisco to "scale, secure and optimize their environments for the agentic AI era," a reference to AI software agents that carry out tasks on their own rather than just answering questions.

The outlook

For the current quarter, Cisco forecast revenue of $18.0 billion to $18.2 billion and adjusted earnings of $1.34 to $1.36 a share. Investing.com said analysts had expected $17.91 billion and $1.23.

For the full fiscal year, Cisco raised its targets to revenue of $74.8 billion to $75.8 billion and adjusted earnings of $5.47 to $5.53 a share. The midpoints compare with analyst estimates of $73.2 billion and $5.15, according to Investing.com.

Other details from the release: remaining performance obligations, a measure of contracted business not yet booked as revenue, rose 8% to $46.2 billion; Cisco completed its purchase of WideField Security during the quarter; and it declared a quarterly dividend of 42 cents a share, payable Jan. 20, 2027.

How the stock traded

Cisco shares closed the regular session up 1.24% at $102.01, according to Yahoo Finance data, one of the few large technology names to rise on Thursday. Investing.com reported that the stock rose about 4% in extended trading after the release. After-hours moves are often thin and can change by the next open.

There is an Nvidia link, too. Colette Kress, named Nvidia's interim CEO on Thursday, spent part of her career in finance at Cisco before joining Nvidia in 2013.

Applied Materials beats, shares little changed

Chip-equipment maker Applied Materials also reported after the bell. Revenue for its fiscal fourth quarter rose 53% to a record $10.41 billion, and adjusted earnings were $4.16 a share, the company said. Benzinga put the consensus at $4.05 a share and $10.30 billion. Applied guided to first-quarter revenue of about $11.1 billion, plus or minus $500 million, above the $10.89 billion Benzinga said analysts expected.

The reaction was muted. The stock fell 3.58% to $380.95 in the regular session, according to Yahoo Finance data, and Benzinga said it traded as high as $389 after hours before slipping back to around $379.67.

What carries into Friday

Cisco's call with analysts should add detail on how much of the AI demand is already in orders. For the market, the report offers a counterweight to the week's AI worries: Nvidia's leadership change, Nebius's 16.8% drop on its spending plans, and a 10-year Treasury yield that closed at 5.10%.