Cisco Systems closed the trading week at an all-time high on Friday, reaching $118.21 per share, as the networking giant raised its artificial intelligence order forecast and delivered quarterly results that surpassed analyst expectations. The stock touched an intraday record of $118.78 before settling.
The company now anticipates AI-related infrastructure orders will reach approximately $9 billion in fiscal 2026, up sharply from its prior estimate of $5 billion. This upward revision reflects surging demand from hyperscale cloud providers who are investing heavily in data center networking equipment to support AI workloads.
In a move to reallocate resources toward high-growth areas, Cisco announced plans to eliminate nearly 4,000 positions, representing less than 5% of its workforce. CEO Chuck Robbins communicated the decision to employees, describing it as a necessary step to fund investments in silicon, optics, security, and AI initiatives.
For the fiscal third quarter, Cisco reported revenue of $15.8 billion, a 12% year-over-year increase. Non-GAAP earnings per share came in at $1.06. The company guided fourth-quarter revenue in a range of $16.7 billion to $16.9 billion and raised its full-year fiscal 2026 revenue forecast to between $62.8 billion and $63.0 billion.
CFO Mark Patterson highlighted double-digit growth at both the top and bottom lines, noting that non-GAAP operating income also reached a record level. The strong performance was driven by robust demand for switches, routers, optics, and silicon that enable high-speed connectivity in AI data centers.
Wall Street largely overlooked the job cuts, focusing instead on the company's expanding order book. Shares surged 17% on Thursday, marking the largest single-day gain in over two decades. The rally comes as investors increasingly view Cisco as a key beneficiary of the AI infrastructure buildout, alongside chipmakers like Nvidia and Broadcom.
However, the broader market faces headwinds. The Nasdaq Composite fell 1.54% on Friday, breaking a six-week winning streak, as rising oil prices and climbing Treasury yields weighed on equities. The 10-year yield is approaching one-year highs near 4.6%, which could pressure growth stocks when trading resumes Monday.
Prediction markets suggest the Federal Reserve is unlikely to cut interest rates in 2026, with Polymarket assigning a 70% probability to no rate cuts this year. This outlook adds to the uncertainty for risk assets, though Cisco's strong AI-driven momentum may help it outperform the broader market in the near term.
Investors will be watching Monday's session closely to see if Cisco can sustain its record run amid a potentially challenging macro environment. The company's gross margins face pressure from product mix shifts and higher memory costs, while tariffs and exemptions remain wildcards. If yields continue to rise or hyperscaler spending moderates, the stock's valuation could come under scrutiny.
