By Khac Phu Nguyen
Publication Date: 2026-08-13 17:39:00
This article first appeared on GuruFocus.
Cisco Systems (NASDAQ:CSCO), the networking and cybersecurity giant, tumbled roughly 8.8% in Thursday’s regular session even after putting up record quarterly numbers and forecasting a stronger-than-expected year ahead. That tells you exactly where Wall Street’s attention is: not the revenue beat, but the price Cisco is paying to chase the AI infrastructure boom. The company is selling a lot more networking gear. The problem is that those extra sales are arriving with thinner margins.
The growth numbers were hard to ignore. Cisco’s fiscal fourth-quarter results showed revenue surging 18% to $17.3 billion, while adjusted earnings climbed 23% to $1.22 per share. Networking revenue jumped 28%, and product orders shot up 35%. AI demand was the headline act: hyperscaler AI-infrastructure orders hit $4 billion in the quarter and $9.3 billion for the full year. Cisco now sees roughly $7.5 billion of revenue from…
