By Khac Phu Nguyen
Publication Date: 2026-08-14 19:08:00
This article first appeared on GuruFocus.
Cisco Systems (NASDAQ:CSCO), the networking and cybersecurity giant, delivered record numbers. Wall Street sold the stock anyway. Shares plunged 8.4% Thursday and slipped another 2% Friday morning despite revenue jumping 18% to $17.3 billion and adjusted earnings climbing 23% to $1.22 per share. That tells you almost everything. Cisco’s problem is not growth. It is expectations. Investors have already priced in a monster AI opportunity, and monster expectations demand monster execution.
The AI engine is certainly roaring. Hyperscaler AI infrastructure orders hit $4 billion in the quarter and $9.3 billion for fiscal 2026. Cisco turned roughly $4 billion of that demand into revenue and expects AI infrastructure revenue to rocket to $7.5 billion in fiscal 2027. Networking product orders surged 40%, extending double-digit growth to eight straight quarters. But here comes the uncomfortable part. Adjusted product…
