By Zacks Equity Research
Publication Date: 2026-04-23 18:53:00
Cisco Systems CSCO is witnessing a sharp acceleration in AI-related demand, especially from hyperscalers. AI orders in second-quarter fiscal 2026 increased to $2.1 billion from $1.3 billion in first-quarter fiscal 2026, which is equivalent to the entire fiscal 2025 AI orders. The AI order for fiscal 2026 has been pegged at more than $5 billion, which is a sign of step-function acceleration instead of incremental growth.
Hyperscaler demand is the core engine of AI momentum, driven by large cloud players placing massive orders. Service provider and cloud orders grew 65% year over year, while hyperscaler demand recorded triple-digit growth. During the same quarter, new AI use cases included two wins in systems and one in optics.
A small number of customers are placing large, lumpy orders, but both the frequency and size of these orders are increasing. As a result, Cisco is becoming a preferred secondary, and in some cases primary vendor, benefiting from the need for supplier…
