Cisco's AI business outlook falls short of investor expectations, shares drop about 4% in after-hours trading

Odaily Planet Daily News According to the company's reported earnings, AI-related sales in fiscal 2027 are expected to account for approximately 10% of Cisco's total revenue. The company expects full-year total revenue of $72.2 billion to $73.4 billion. This is the first time Cisco has provided a full-year AI revenue forecast. Some analysts believe this projection is too conservative, given that Cisco secured approximately $4 billion in AI-related orders in the quarter ending July 25 alone. After the earnings release, Cisco's shares fell about 4% in after-hours trading.

Cisco CEO Chuck Robbins stated that the company's AI-related revenue in fiscal 2026 was approximately $4 billion, while orders exceeded $9 billion. Since large AI orders are typically placed well in advance, there is a time lag between order conversion and revenue recognition. During the same period, Cisco's fourth-quarter revenue grew 18% year-over-year to $17.3 billion, beating market expectations of $16.8 billion; adjusted earnings per share came in at $1.22, above the expected $1.17. (Bloomberg)