Cisco (CSCO) Delivers Record Q4 Results with +18% Revenue Growth on AI Momentum
Key Takeaways
- Cisco reported record fourth-quarter fiscal 2026 revenue of $17.3 billion, up 18% year over year and above consensus estimates of roughly $16.8 billion.
- Adjusted earnings per share (EPS) came in at $1.22, beating the $1.17 consensus estimate by $0.05; GAAP (generally accepted accounting principles) diluted EPS was $0.97.
- Total product orders rose 35% year over year, while artificial intelligence (AI) infrastructure orders from large cloud providers, known as hyperscalers, reached $4 billion in the quarter.
- Fiscal 2027 guidance calls for revenue of $72.2 billion to $73.4 billion and adjusted EPS of $5.05 to $5.11, above consensus expectations.
- Non-GAAP gross margin declined 2.1 percentage points to 66.3%, reflecting a shift toward hardware-heavy AI infrastructure sales.
- Despite the beat, shares reversed lower in after-hours trading as investors weighed valuation and margin pressures against strong demand.
Why These Results Stand Out
Cisco's fourth-quarter fiscal 2026 results, for the period ended July 25, 2026, close out a fiscal year in which the company re-emerged as a key beneficiary of AI-driven network spending. As one of the world's largest networking equipment providers, Cisco is closely watched as a barometer for enterprise technology budgets, data center investment, and security demand. The report matters because it shows whether AI infrastructure momentum is translating into sustainable revenue and profit growth, not just order backlog. Investors also use Cisco's guidance to gauge the durability of the broader networking upgrade cycle and the company's ability to manage margin pressure from a changing product mix. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
The Quarter's Reported Figures
Cisco posted record quarterly revenue of $17.25 billion, an 18% increase from $14.67 billion in the prior-year period. Product revenue rose 24% to $13.5 billion, while services revenue was flat at $3.8 billion. Networking led the growth with a 28% increase to approximately $9.8 billion. Security revenue rose 14%, collaboration revenue increased 12%, and observability revenue grew 6%.
On a GAAP basis, net income rose 51% to $3.86 billion, or $0.97 per diluted share, compared with $2.55 billion, or $0.64 per share, a year earlier. On a non-GAAP, or adjusted, basis, which excludes certain items, net income rose 23% to $4.9 billion, or $1.22 per share. That topped the consensus estimate of $1.17 per share.
Profitability showed a mixed picture. Non-GAAP operating margin improved to 35.9%, but non-GAAP gross margin declined to 66.3% from 68.4% a year earlier. Cisco attributed the gross margin decline mainly to a higher mix of AI infrastructure hardware shipments. Operating cash flow increased 27% to $5.4 billion.
For the full fiscal year, Cisco reported record revenue of $63.3 billion, up 12%, and non-GAAP EPS of $4.33, up 14%. The company issued fiscal 2027 guidance for revenue of $72.2 billion to $73.4 billion and adjusted EPS of $5.05 to $5.11. For the first quarter of fiscal 2027, Cisco guided to revenue of $18.0 billion to $18.2 billion and adjusted EPS of $1.32 to $1.34, both ahead of consensus.
How Investors Reacted
Cisco shares initially jumped as much as 8% in after-hours trading following the release before reversing lower, according to market reports. The reversal highlighted a cautious investor response despite a clear top-and-bottom-line beat. Heading into the report, the stock had climbed roughly 60% year to date and was trading near its all-time high of about $130, leaving little room for disappointment. With the stock valued near 30 times forward earnings, above the broader market multiple, investors focused on the decline in gross margin and questions about the durability of hyperscaler AI orders. The after-hours pullback suggests the market wanted stronger confirmation that AI-driven growth can continue without further eroding profitability.
Forward Outlook and What to Watch
Looking ahead, Cisco's fiscal 2027 guidance points to accelerating full-year growth, supported by expectations that AI infrastructure revenue will nearly double to about $7.5 billion from roughly $4 billion in fiscal 2026. The company also pointed to strong product order momentum, including networking orders up 40% year over year in the fourth quarter, as a sign that demand extends beyond AI-specific hardware.
Several factors will shape the next several quarters. First, investors will monitor whether non-GAAP gross margin stabilizes or continues to face pressure from memory costs, component availability, and a higher mix of AI hardware. Second, management noted that price increases contributed about five percentage points to fourth-quarter revenue growth, and those benefits are expected to be lapped in fiscal 2027. Third, the company flagged that fiscal 2027 guidance implies slower growth in the second half of the year due to tougher comparisons. Fourth, Cisco is navigating tariff exposure and a restructuring program announced in May that reduces about 4,000 positions, or roughly 5% of its workforce, as it redirects investment toward AI and growth areas. Finally, investors will watch remaining performance obligations (RPO), a measure of contracted future revenue, which stood at $46.7 billion, and annual recurring revenue (ARR), which reached $32.1 billion, for evidence that software and subscription momentum is holding up. From what I see, these metrics will be key indicators in the quarters ahead.
Integrating AI Tools into Analysis
When reviewing earnings-driven moves like this one from Cisco, I find it helpful to cross-reference with Tickeron’s AI Screener. The tool lets me scan peers and related setups using technical patterns, fundamentals, and performance filters, which adds context without replacing the core data review. It has become a regular part of how I organize ideas around sectors seeing AI-related spending.
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Financial writer and active order flow futures trader with a focus on fundamental analysis, macroeconomic factors, and equity research. I make in-depth blogs on stocks and ETFs, bridging the gap between raw market data and real-world trading decisions.
CSCO's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for CSCO turned positive on September 11, 2026. Looking at past instances where CSCO's MACD turned positive, the stock continued to rise in 34 of 50 cases over the following month. The odds of a continued upward trend are 68%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 37 of 61 cases where CSCO's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 61%.
The Momentum Indicator moved above the 0 level on September 17, 2026. You may want to consider a long position or call options on CSCO as a result. In 51 of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 61%.
Following a +1.93% 3-day Advance, the price is estimated to grow further. Considering data from situations where CSCO advanced for three days, in 226 of 361 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
CSCO may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The 10-day moving average for CSCO crossed bearishly below the 50-day moving average on August 20, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 5 of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 31%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CSCO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 42%.
The Aroon Indicator for CSCO entered a downward trend on September 21, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 11 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock better than average.
The Tickeron PE Growth Rating for this company is 22 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 35 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 41 (best 1 - 100 worst), indicating steady price growth. CSCO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 57 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.584) is normal, around the industry mean (6.381). P/E Ratio (32.886) is within average values for comparable stocks, (107.989). Projected Growth (PEG Ratio) (1.010) is also within normal values, averaging (0.788). Dividend Yield (0.015) settles around the average of (0.006) among similar stocks. P/S Ratio (6.784) is also within normal values, averaging (11.937).
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a manufacturer of Internet Protocol based networking products and services related to the communications and information technology industry
Industry TelecommunicationsEquipment
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