Cisco Systems Inc (NASDAQ:CSCO, XETRA:CIS) reported fiscal third quarter 2026 results that topped Wall Street expectations on both revenue and earnings, driven by accelerating demand for AI infrastructure, sending shares up about 14% to about $116 on Thursday morning.
The company posted adjusted earnings per share of $1.06 for the quarter ended April 2026, compared with analyst expectations of $1.04.
Revenue came in at $15.84 billion, above estimates of $15.56 billion, and up 12% year-over-year.
Cisco said the quarter reflected broad-based strength across its portfolio. Growth was increasingly driven by AI-related infrastructure demand, particularly from hyperscale customers. Total product orders rose 35% year-over-year, or 19% excluding hyperscalers.
Networking orders increased more than 50%, while data center switching orders grew more than 40%. Campus networking orders rose more than 25% as Cisco highlighted an ongoing multi-year refresh cycle.
For the fourth quarter, Cisco forecast revenue between $16.7 billion and $16.9 billion, with adjusted earnings per share of $1.16 to $1.18. GAAP EPS is expected between $0.80 and $0.85.
For the full fiscal year, the company raised its outlook to revenue of $62.8 billion to $63 billion and adjusted EPS of $4.27 to $4.29, reflecting stronger-than-expected demand trends tied to AI infrastructure and enterprise networking upgrades.
"Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI,” Cisco CEO Chuck Robbins said in a statement.
"Cisco is well-positioned as the critical infrastructure for the AI era, building on our technology leadership and customer trust, while innovating at the speed and scale that our dynamic world demands."
UBS analysts raised their price target on Cisco to $132 from $95, citing stronger demand trends and higher earnings estimates, and reiterated a Buy rating. They said the higher target reflects improved visibility into AI-driven growth and increasing confidence in Cisco’s earnings trajectory.
The bank said Cisco “delivered on AI order strength while dodging a gross margin pothole,” noting that both revenue and AI orders exceeded expectations while margins came in broadly in line despite rising component costs and supply chain headwinds. UBS added that the results highlight Cisco’s operational resilience at a time when parts of the AI infrastructure sector have seen execution misses or margin pressure.
AI orders reached $1.9 billion in the quarter, bringing fiscal-year-to-date AI orders to $5.3 billion, ahead of prior expectations. UBS also pointed to continued hardware momentum, including more than 750,000 400G pluggables shipped and over 40,000 800G units, along with ongoing hyperscaler design wins across systems and optical segments.
The analysts said Cisco’s updated outlook, including a raised AI order target of around $9 billion for fiscal 2026, should help support the stock even at all-time highs, reflecting sustained demand for AI infrastructure and networking upgrades.