Cisco Systems shares reached a new milestone on Friday, closing at $120.42 after touching an intraday high of $121.43. The stock gained 1.5% on the day, capping a week that saw the networking giant's market value approach $480 billion. Trading volume surged to 42.18 million shares, well above the typical daily average, signaling robust investor interest.
The rally was fueled by Cisco's upward revision of its fiscal 2026 AI infrastructure order forecast to $9 billion, up from a prior estimate of $5 billion. The company reported that AI infrastructure orders from hyperscale cloud providers have already reached $5.3 billion so far this fiscal year. This news, combined with strong fiscal third-quarter results, has repositioned Cisco in the eyes of many investors as a key player in the AI hardware space rather than a legacy networking firm.
For the fiscal third quarter, Cisco posted revenue of $15.8 billion, a 12% year-over-year increase, while product orders climbed 35%. CEO Chuck Robbins highlighted "very strong, broad-based demand" and described Cisco as "critical infrastructure for the AI era." CFO Mark Patterson noted that both revenue and profit posted double-digit gains, with results exceeding the high end of guidance.
The stock's recent ascent began earlier this month after Cisco reported better-than-expected results and announced plans to cut approximately 4,000 jobs, redirecting resources toward AI initiatives. Melius Research analysts have pointed to AI inference as a "clear secular tailwind" for networking demand, suggesting that the momentum could persist.
Looking ahead, investors are focused on two key events next week. Cisco's annual Cisco Live conference kicks off in Las Vegas from May 31 to June 4, where the company is expected to provide concrete product updates alongside Nvidia, focusing on enterprise AI adoption, AI factories, and data center infrastructure. Additionally, the U.S. Bureau of Labor Statistics will release the May employment report on Friday, June 5, which could influence interest rate expectations and impact tech valuations.
Despite the positive sentiment, risks remain. Cisco must demonstrate that its AI orders translate into revenue without compressing margins. The company's guidance already accounts for tariff impacts, and any tightening of cloud budgets from major hyperscalers could swing orders. After the recent rally, the stock trades at roughly 40 times earnings, leaving less room for disappointment.
In the broader market, other AI-networking names also gained ground. Arista Networks rose 2.7% to $159.47, while Hewlett Packard Enterprise jumped 12.7% to $43.04. The S&P 500 edged up 0.2% on Friday, marking its ninth consecutive weekly gain, and the Nasdaq added 0.2% to finish the week up 2.4%.
