Cisco Systems shares ended the holiday-shortened week near the $120 mark, trading at $120.42 on Friday after reaching an intraday high of $121.43. The stock gained 1.5% on the day but finished the week almost flat, mirroring the range-bound trading seen during the Memorial Day period.
Earnings and AI Momentum
The company's fiscal third-quarter results, released on May 13, remain the primary catalyst. Revenue reached $15.8 billion, a 12% increase year-over-year, with non-GAAP earnings per share of $1.06. Total product orders surged 35%, while networking product orders jumped over 50%, reflecting robust demand across Cisco's portfolio.
AI infrastructure orders from hyperscalers reached $5.3 billion fiscal year-to-date, and management raised its full-year AI order guidance to $9 billion, up from the prior $5 billion. CEO Chuck Robbins highlighted "very strong, broad-based demand" during the period, while CFO Mark Patterson cited "financial discipline" after the company surpassed the high end of its guidance.
Guidance and Analyst Views
Cisco forecast fourth-quarter revenue between $16.7 billion and $16.9 billion, and fiscal 2026 revenue in the range of $62.8 billion to $63.0 billion. Rosenblatt analyst Mike Genovese raised his price target to $150 from $100, maintaining a Buy rating, noting that Q4 guidance implies roughly 15% growth with gross margins stable near 66%.
Melius Research observed that Cisco's networking business benefits from a "clear secular tailwind from AI inference," as more AI models run at scale. The firm connected this momentum to Robbins' strategic push into custom silicon and optics.
Peer Earnings and Macro Focus
Investors will watch upcoming reports from key peers: HPE reports on June 1, Broadcom on June 3, and Ciena on June 4. These results could provide further context on the AI infrastructure landscape. On the macro front, the U.S. nonfarm payrolls report on June 5 will be critical, with Barclays chief U.S. economist Marc Giannoni noting the Fed may focus more on moving averages given recent volatility in payroll data.
Cisco has already incorporated tariff impacts into its margin and earnings outlook, announcing a restructuring plan of up to $1 billion in pre-tax charges focused on silicon, optics, security, and AI. However, risks remain if AI orders take longer to convert to revenue, component costs rise, or competitors deliver stronger results.
As June trading begins, Cisco's near-term trajectory may depend less on its own earnings commentary and more on sustained investor appetite for AI infrastructure names.
