Cisco’s AI Sales Grow, But Company Maintains Careful Outlook
Cisco Systems, a leader in network infrastructure, reports a steady increase in artificial intelligence (AI) sales but remains cautious about its near-term revenue forecast. For the fiscal year ending July 2026, Cisco expects revenue between US$59 billion and US$60 billion. This forecast aligns with Wall Street's average estimate but falls short of some analysts' hopes for over US$61 billion.
Chief Financial Officer Mark Patterson highlighted that this outlook assumes current tariffs will stay in place through the end of 2026. He emphasized Cisco’s focus on supply-chain management to reduce tariff impacts where possible.
Strong Quarterly Performance and AI Revenue Growth
In the fiscal fourth quarter, which ended July 26, Cisco’s revenue rose 7.6% to US$14.7 billion, slightly above expectations. Earnings per share came in at 99 US cents, also exceeding estimates. AI-related revenue hit about US$1 billion in fiscal 2025, signaling growing traction in this space.
Despite this progress, competition in AI infrastructure is intensifying. Companies like Broadcom and Hewlett Packard Enterprise, which recently acquired Juniper Networks, are targeting the same client base.
Key Strategic Moves and Regional Partnerships
CEO Chuck Robbins noted that federal business should return to growth in the new fiscal year, following a period of government procurement challenges. To diversify its offerings, Cisco acquired Splunk for US$28 billion in 2024, strengthening its security and monitoring software portfolio.
Cisco is also expanding its AI footprint internationally, with partnerships including Saudi Arabia’s Humain and involvement in the Stargate project in the United Arab Emirates. These Middle East initiatives are expected to scale up in the second half of fiscal 2026. Robbins described Cisco’s role as a “core system provider” for large-scale AI software training and operations.
What Sales Professionals Should Know
- Steady AI Growth: Cisco’s AI revenue is growing steadily but not at a breakneck pace. Sales teams can leverage this by focusing on Cisco’s expanding AI infrastructure capabilities and regional projects.
- Competitive Market: Be aware that competitors are aggressively pursuing the same markets. Highlight Cisco’s strong supply chain and recent acquisitions to differentiate offerings.
- Federal Sector Opportunities: With federal business expected to rebound, sales professionals should prepare to engage government clients more actively.
- Global Expansion: The Middle East partnerships open new doors. Understanding these projects will be key to winning deals in these growing markets.
For sales teams looking to deepen AI knowledge and sharpen their skills, exploring specialized courses can be valuable. Resources like Complete AI Training’s latest AI courses offer practical insights tailored for professionals advancing in AI-related fields.
In summary, Cisco’s AI business shows promise, but the company’s overall cautious revenue guidance suggests a balanced approach for sales strategies. Keeping an eye on evolving market dynamics and leveraging Cisco’s growing portfolio will be essential for success.
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