Cisco Finds Goldmine in Corporate America’s Collective Terror of Being Left Out of AI Disruption…

So Cisco reported third-quarter earnings that beat across the board. Good stuff. Top line, bottom line, and guidance all didn’t just clear the bar, they hurdled right over it with ease. Revenue hit $14.15 billion against the $14.08 billion forecast. Adjusted EPS came in at 96 cents versus the expected 92. A clean sweep. But, but, but… the real story wasn’t the numbers. It was the subtext. Cisco is now deep in the AI infrastructure game, and it’s wagering that the only thing more durable than enterprise demand is enterprise FOMO.

(Source: Giphy) 

In short, CEO Chuck Robbins confirmed Cisco has already raked in more than $1.25 billion in AI-related infrastructure orders this fiscal year, hitting a target they weren’t supposed to hit until sometime next quarter. That includes $600 million in the last three months alone, mostly from hyperscalers (read: the internet’s landlords), who are apparently fed up with Nvidia’s InfiniBand toll booth and are now sniffing around Cisco’s Ethernet-based offerings. Meta’s among them, reportedly testing Ethernet fabrics for AI clusters as an off-ramp from the InfiniBand dependency. Robbins described it as customers “feeling very good about the technology.” Translation: People are done bleeding money for Nvidia. 

On the call, Robbins said customers are continuing to spend on AI infrastructure “until they just absolutely have to stop.” That’s a direct quote. Not a paraphrase. A CEO of a major U.S. tech company describing AI capex like it’s a Vegas bender. The implication is straight to the throat: demand isn’t slowing because no one wants to be the first to admit they don’t understand the thing they’re spending millions to build. 

(Source: CNBC) 

Meanwhile, networking revenue hit $7.07 billion, up 8%, while security revenue jumped 54% to $2.01 billion, bolstered by the addition of Splunk. That still missed expectations, but no one's dwelling… especially not when the AI narrative is doing the heavy lifting. Which brings us to the personnel shift. CFO Scott Herren is out, effective July 26. No scandal or dramatic exit… just boring retirement notice and a LinkedIn update waiting to happen. He joined the company from Autodesk in 2020, helped steer Cisco through a pandemic, a billion-dollar acquisition, and now an AI pivot. His replacement happens to be none other than Mark Patterson, Cisco’s chief strategy officer and a 25-year vet. Meaning, if consistency is your thing, this is the least disruptive CFO transition imaginable. 

Also, Jeetu Patel got a title bump. He’s now president and chief product officer. Which is technically news, though functionally it’s just more validation that Cisco’s product roadmap is getting the full AI cosmetic surgery treatment.

(Source: Yahoo Finance) 

In addition, Cisco also mentioned that its Q4 guidance already factors in Trump-era tariffs… 30% on China, 25% on Canada and Mexico. Robbins said there’s been no material change in customer behavior (read: no one’s pausing orders to do tariff math). Bigly. 

As for the stock, shares rose nearly 5% after the earnings release, outperforming almost everything else on the Nasdaq 100. For the year, it’s up 3.5%. Not euphoric, but not dead either. As for today? Shares are down a smidge under -1%. But across the board, the fundamentals and business are working. However, if the AI money hose slows down, this whole thing could get real awkward, real fast. 

(Source: Giphy) 

Which means, if you’re a Cisco shareholder, keep your head on the swivel and place your bets accordingly. If you’re not, don’t YOLO into this stock just because it obliterated every estimate that mattered. Until next time, friends… 

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Stocks.News holds positions in Meta as mentioned in the article.