Artificial Intelligence surge boosts Cisco's expansion
In a surprising turn of events, Cisco, a leading network equipment provider, has announced that orders for AI infrastructure in the 2024/2025 fiscal year have exceeded their initial planning by more than double. This surge is primarily driven by strong demand from hyperscalers, cloud providers, and carriers preparing for AI-driven workloads.
The excess orders amount to over $800 million in Q4 alone and more than $2 billion in total for the fiscal year, doubling the original $1 billion target. This growth is attributed to expanding Agentic AI and inferencing demands, a focus on innovation and disciplined investments, and the expanding adoption of AI beyond hyperscalers to emerging AI cloud providers and enterprises.
Cisco's CEO, Chuck Robbins, emphasised that this demand is not a fleeting trend but a sustained growth driver as AI adoption expands into enterprises and end-user networking environments. The company is investing in AI-native data center tools, new high-speed networking gear, and strategic partnerships to position itself for future AI-driven network demands globally.
In addition to the surge in AI infrastructure orders, Cisco's financial performance for the 2024/2025 fiscal year has been strong. Net income reached $3.81 per share, and revenues grew by 5% to $56.7 billion. The net income for the year slightly exceeded the targets raised several times in recent months, and the revenues partially exceeded the raised targets.
Revenue in the last quarter increased by 8% to $14.7 billion, and net income grew by 2%. The statement about the strong numbers of orders for AI infrastructure was made by Chuck Robbins on Wednesday. The company also announced plans to pay a final dividend of $0.41 per share.
Looking forward, for the 2025/2026 fiscal year, Cisco is targeting earnings per share between $4.00 and $4.06, and revenues of $59 to $60 billion. The stock slipped slightly on the Wall Street following the announcement.
The boom in data centers for Artificial Intelligence has caught Cisco off guard, but the company is well-positioned to capitalise on this trend with its strategic investments and focus on innovation. The surge in AI infrastructure orders reflects industry-wide acceleration of AI workloads requiring advanced, AI-optimized networking and compute infrastructure.
The surge in AI infrastructure orders, primarily driven by expanding Agentic AI and inferencing demands, has exceeded Cisco's initial planning by more than double, amounting to over $2 billion in total for the 2024/2025 fiscal year. Silicon Valley's leading network equipment provider, Cisco, is strongly positioned to capitalize on this trend, investing in AI-native data center tools, new high-speed networking gear, and strategic partnerships to cater to future AI-driven network demands.
