Cisco Stock Soars 20% After-Hours as AI Infrastructure Orders Ignite Biggest Rally in Years

Shares of Cisco surged sharply after earnings as investors finally embraced the company’s emerging role in the AI infrastructure boom following years of lagging behind higher-profile semiconductor names.

The networking giant delivered stronger-than-expected quarterly results, sharply raised its AI order outlook, and signaled that hyperscale AI spending is now flowing beyond chips and into networking infrastructure.

Cisco Finally Gains Traction in the AI Trade

For much of the AI rally, Cisco was overshadowed by companies tied directly to GPUs and semiconductor manufacturing.

That narrative shifted dramatically after the company reported a major acceleration in AI infrastructure demand from hyperscalers and enterprise customers.

Cisco reported fiscal third-quarter revenue of $15.8 billion, up 12% year over year, while adjusted EPS came in at $1.06, ahead of analyst expectations.

The biggest surprise came from AI-related infrastructure orders.

Cisco said it has now secured $5.3 billion in AI infrastructure and hyperscaler orders year to date and raised its full-year forecast to $9 billion from a prior target of $5 billion.

The company also raised expected AI infrastructure revenue for fiscal 2026 to $4 billion from $3 billion previously.

That update reinforced a growing market belief that the AI spending cycle is expanding beyond processors into networking, optics, switches, routers, and data-center connectivity.

Networking Demand Accelerates Across AI Data Centers

Cisco said networking product orders surged more than 50% year over year during the quarter, while data-center switching orders climbed over 40%.

Campus networking orders also rose more than 25% as enterprises accelerated infrastructure refresh cycles.

The results suggest hyperscalers and enterprise customers are rapidly expanding the high-speed networking infrastructure required to support large-scale AI workloads.

Investors increasingly view Cisco as a major beneficiary of AI infrastructure spending because AI systems require enormous volumes of:

• High-speed switching
• Optical networking
• Routing infrastructure
• Secure data movement
• AI-ready campus networks

Cisco also introduced new next-generation switches and routers during the quarter, helping reinforce its positioning in AI-focused networking architecture.

Job Cuts Reflect Broader AI Restructuring

Alongside the strong earnings report, Cisco announced plans to reduce its workforce by fewer than 4,000 employees as part of an AI-focused restructuring effort.

CEO Chuck Robbins said the company is reallocating investment toward areas with the strongest long-term AI growth potential, including:

• Silicon
• Optics
• AI infrastructure
• Security
• Automation

The restructuring is expected to cost up to $1 billion.

Management framed the layoffs as part of a broader strategy to improve operational focus while accelerating investment into higher-growth AI-related businesses.

The move also reflects a wider trend across the technology sector as companies increasingly redirect spending toward AI initiatives.

Cisco’s Fundamentals Continue Improving

Beyond the AI headlines, Cisco’s core financial performance remained strong.

The company reported:

• GAAP EPS growth of 37%
• Non-GAAP EPS growth of 10%
• Networking revenue growth of 25%
• Operating margin above 34% on a non-GAAP basis

Remaining performance obligations rose to $43.5 billion, while deferred revenue reached $28.6 billion.

Cisco also returned roughly $2.9 billion to shareholders during the quarter through dividends and share buybacks.

The company maintains a strong balance sheet with approximately $16.6 billion in cash and investments.

Technical Analysis: CSCO Breakout Strengthens Bullish Momentum

Technically, Cisco’s chart has improved significantly after the earnings breakout.

The stock surged sharply after hours and appears positioned for one of its strongest rallies since the early 2000s.

CSCO had already been trading within a strong longer-term uptrend before earnings, supported by improving AI sentiment and rising institutional participation.

Key Technical Levels

• Immediate resistance: $120-$122
• Psychological breakout zone: $130
• Near-term support: $100-$102
• Major support: $92-$95

The stock remains above all major moving averages, reinforcing the broader bullish structure.

The recent breakout likely strengthens the existing golden-cross trend structure, where shorter-term moving averages remain above longer-term averages.

RSI conditions are likely approaching overbought territory after the sharp move higher, suggesting elevated volatility and possible consolidation risk in the near term.

MACD momentum remains strongly bullish following the earnings breakout, while volume surged sharply as investors aggressively repriced Cisco’s AI opportunity.

Long-Term Outlook Depends on AI Infrastructure Expansion

Cisco’s biggest opportunity now revolves around whether AI-related infrastructure spending continues accelerating over the next several years.

Key areas investors will monitor include:

• Hyperscaler networking demand
• Enterprise AI infrastructure refresh cycles
• Data-center switching growth
• Security and observability adoption
• Margin expansion
• AI-related order conversion into revenue

Risks still remain:

• Slower enterprise spending
• Competition from networking rivals
• AI infrastructure spending slowdowns
• Margin pressure from hardware mix shifts

Still, Cisco’s latest results suggest the company may finally be transitioning from a mature networking vendor into a more relevant AI infrastructure platform.

The market reaction reflects growing confidence that the next phase of the AI buildout may depend just as heavily on networking and connectivity as it does on chips themselves.