Cisco lifts its AI hyperscaler target to $9B as networking sales jump 43%

Cisco reported first-quarter fiscal 2027 revenue of $18.5 billion, up 24% from a year earlier, and raised its full-year outlook. Bloomberg’s report on the results said the current-quarter forecast beat Wall Street estimates.

The figures below come from Cisco’s own earnings release for the quarter ended October 24, 2026, published on November 12.

Networking sales jump 43% in the quarter

Product revenue rose 32% and services revenue rose 1%. Networking was the driver: it grew 43% to $11.1 billion. Security rose 7%, Collaboration 8% and Observability 2%. By region, the Americas grew 28%, EMEA 18% and Asia Pacific, Japan and China 21%.

Net income on a GAAP basis was $4.6 billion, or $1.14 per share, up from $0.72. On a non-GAAP basis, earnings were $1.40 per share, up from $1.00. Operating cash flow reached $4.4 billion, up 36%. Cisco returned $3.7 billion to shareholders, split between $2.0 billion of buybacks and $1.7 billion of dividends.

CEO Chuck Robbins said Cisco delivered “the strongest revenue and non-GAAP earnings per share growth rates for Cisco in over 15 years,” and described the company as being at the very early stage of a multi-year networking cycle he called a supercycle.

A higher guide, led by AI infrastructure for hyperscalers

For the second quarter, Cisco expects revenue of $18.0 billion to $18.2 billion and non-GAAP earnings of $1.34 to $1.36 per share. For the full fiscal year it now forecasts revenue of $74.8 billion to $75.8 billion and non-GAAP earnings of $5.47 to $5.53 per share. GAAP earnings are expected at $4.38 to $4.44.

Cisco also raised its expectation for AI infrastructure revenue from hyperscalers to $9 billion in fiscal 2027, which it says is more than double the fiscal 2026 total. CFO Mark Patterson said the strength of the quarter gave the company confidence to lift both its revenue and earnings guidance.

The raise in context, and the margin trade-off

Compared with the guidance Cisco gave in August, the move is sizable. Coverage of the fiscal fourth-quarter report, including Nasdaq’s summary of the earnings call, put the earlier full-year range at $72.2 billion to $73.4 billion, with non-GAAP earnings of $5.05 to $5.11 per share and hyperscaler AI revenue of $7.5 billion. The new ranges are higher on every one of those measures. The same coverage said hyperscaler AI orders were $4 billion in the fourth quarter and $9.3 billion for fiscal 2026. The November release reports no orders figure, so how much of the $9 billion target is already booked cannot be read from it.

The release also shows a cost. Non-GAAP gross margin fell to 65.6% from 68.1% a year earlier, with product margin at 63.7% and services at 72.9%. GAAP gross margin was 63.7% against 65.5%. The release does not say why margins fell, and any link to the mix of AI infrastructure sales is an inference the source does not support. Cisco’s guidance for next quarter, a non-GAAP gross margin of 65% to 66%, implies the lower level is expected to persist for now.

Remaining performance obligations, the contracted revenue not yet recognized, were $46.2 billion, up 8%, and deferred revenue was $30.1 billion, up 7%. Both grew far more slowly than product revenue, so the surge is coming mainly from hardware sales rather than from subscriptions.

What the reports do not establish

The figures are Cisco’s own, and the forward numbers are guidance, not results. The release names no individual customers and gives no breakdown of AI revenue for the quarter. It also does not say how much of the 43% networking growth came from AI-related demand, although Bloomberg’s headline attributes the momentum to AI.

The result lands in a week when AI infrastructure spending is under scrutiny elsewhere. Our recent coverage of how CoreWeave is financing its build-out with chip-backed debt and customer pre-payments shows how much of that spending depends on borrowed money, which is the demand side of the orders Cisco is now forecasting. Cisco’s numbers suggest the networking equipment inside those data centers is already selling in volume.

Cisco will pay a quarterly dividend of $0.42 on January 20, 2027, to holders of record on January 4. Its next scheduled report will cover the second quarter, for which it has now set the guidance above.