Cisco's Q1 Earnings Shine Amidst AI Surge

Post by : Bianca Suleiman

San Jose, California – Cisco Systems recently released an impressive earnings report, propelling its stock upwards by more than 7% during after-hours trading. The networking powerhouse exceeded Wall Street predictions, offering an optimistic forecast driven by substantial growth in demand for AI infrastructure.

For the quarter ending October 25, Cisco posted adjusted earnings that increased by 10% year-over-year, reaching $1 per share, while revenue climbed 8% to $14.9 billion, surpassing analyst expectations. This quarter was notably significant as it marked the first complete period incorporating software company Splunk, following Cisco’s acquisition for $25 billion.

The surge in Cisco’s involvement in AI infrastructure stood out prominently. Orders for AI-focused networking solutions skyrocketed to over $1.3 billion, a substantial rise from $800 million in the previous quarter. Cisco attributed this boom mainly to cloud service providers enhancing next-gen AI data centers that require swift Ethernet upgrades. Overall product orders increased by 13%, improving from 7% in the last quarter.

Capitalizing on the AI trend, Cisco has bolstered its partnership with Nvidia to produce leading-edge networking solutions and is gearing up to penetrate the AI server sector, posing a challenge to established competitors like Dell.

Cisco projects revenue for the January quarter to fall between $14.9 billion and $15.3 billion, with a central estimate of $15.1 billion, significantly above analyst predictions of $14.62 billion. The company's renewed emphasis on sustainable growth, shareholder returns, and infrastructure upgrades is resonating positively with investors.

Furthermore, Cisco’s strategic transition from traditional networking hardware to software, services, and cybersecurity is beginning to show results. With Splunk now fully incorporated, Cisco is set to enhance its presence in the realms of data analytics and security.

As of Wednesday's closing, Cisco shares have already surged by more than 24% in 2025, and the post-earnings rise to $79.16 reflects a growing confidence among investors regarding its AI-driven trajectory.