We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Cisco's Focus on Web-Scale Clients Bring More AI Deals?
Read MoreHide Full Article
Key Takeaways
Cisco secured $600M in AI infrastructure orders in Q3, topping its $1B annual goal ahead of schedule.
Web-scale customers drove triple-digit order growth, boosting demand for Cisco's AI-ready hardware.
Partnerships with NVIDIA, Microsoft and others strengthen Cisco's AI data center expansion plans.
Cisco Systems (CSCO - Free Report) is intensifying its focus on web-scale clients as part of its strategy to accelerate AI infrastructure growth and capture the booming AI infrastructure market.
In the third quarter of fiscal 2025, the company reported more than $600 million in AI infrastructure orders, surpassing its full-year target of $1 billion a quarter early. This surge is being driven by rising demand from web-scale customers, with three of Cisco’s top six clients in this category posting triple-digit order growth.
The company’s acceleration in AI infrastructure is powered by its Silicon One G200 chip for AI networking, along with high-performance hardware such as AI PODs and 800G Nexus switches, all built for scalable, low-latency AI workloads. CSCO’s stronghold in enterprise networking, along with its recent Splunk acquisition, ensures it’s well-positioned for the infrastructure demand.
Strategic partnerships with NVIDIA, Microsoft, G42 and Saudi Arabia’s HUMAIN AI company are expanding Cisco’s reach into both sovereign and commercial AI data center buildouts. These alliances, combined with a strong product pipeline, position the company to drive continued AI order growth from both web-scale and enterprise customers.
Meanwhile, networking product orders continue to post double-digit growth, reflecting the strength of Cisco’s secure infrastructure portfolio. Supported by global partnerships and a robust AI pipeline, the company appears well-positioned to drive sustained AI order growth in the near future.
CSCO Battles Rivals in AI-Driven Networking Space
Hewlett-Packard Enterprise (HPE - Free Report) has emerged as a stronger AI networking rival to Cisco following its acquisition of Juniper Networks, expanding its AI-native infrastructure portfolio. Integrating Aruba, GreenLake and Mist AI, HPE now delivers a robust edge-to-cloud stack. HPE’s deepening partnership with NVIDIA aims to simplify the deployment of enterprise generative AI through preconfigured, full-stack solutions. This strategic alignment positions HPE as a formidable challenger to Cisco’s legacy platforms in the fast-evolving AI and hybrid cloud landscape.
Arista Networks (ANET - Free Report) is a key AI networking competitor to Cisco, driven by its Ethernet-optimized AI platforms, EOS software and hyperscaler-focused architecture. Arista Networks projects second-quarter 2025 revenues of $2.1???billion, driven by strong growth momentum. Arista Networks' recent acquisition of VeloCloud expands its presence in the enterprise edge space. With advanced automation, telemetry and zero-touch operations, Arista Networks is well-positioned as a leading choice for AI-ready data center and edge networking solutions.
CSCO’s Price Performance, Valuation & Estimates
Shares of Cisco have gained 15.4% year to date compared with the Zacks Computer – Networking industry’s return of 14.6%.
CSCO’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CSCO appears overvalued, trading at a forward 12-month price-to-sales ratio of 4.58, slightly higher than the industry’s 4.45X. Cisco carries a Value Score of D.
CSCO’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.01 per share, up by a penny over the past 30 days and implying year-over-year growth of 5.99%.
Image: Bigstock
Will Cisco's Focus on Web-Scale Clients Bring More AI Deals?
Key Takeaways
Cisco Systems (CSCO - Free Report) is intensifying its focus on web-scale clients as part of its strategy to accelerate AI infrastructure growth and capture the booming AI infrastructure market.
In the third quarter of fiscal 2025, the company reported more than $600 million in AI infrastructure orders, surpassing its full-year target of $1 billion a quarter early. This surge is being driven by rising demand from web-scale customers, with three of Cisco’s top six clients in this category posting triple-digit order growth.
The company’s acceleration in AI infrastructure is powered by its Silicon One G200 chip for AI networking, along with high-performance hardware such as AI PODs and 800G Nexus switches, all built for scalable, low-latency AI workloads. CSCO’s stronghold in enterprise networking, along with its recent Splunk acquisition, ensures it’s well-positioned for the infrastructure demand.
Strategic partnerships with NVIDIA, Microsoft, G42 and Saudi Arabia’s HUMAIN AI company are expanding Cisco’s reach into both sovereign and commercial AI data center buildouts. These alliances, combined with a strong product pipeline, position the company to drive continued AI order growth from both web-scale and enterprise customers.
Meanwhile, networking product orders continue to post double-digit growth, reflecting the strength of Cisco’s secure infrastructure portfolio. Supported by global partnerships and a robust AI pipeline, the company appears well-positioned to drive sustained AI order growth in the near future.
CSCO Battles Rivals in AI-Driven Networking Space
Hewlett-Packard Enterprise (HPE - Free Report) has emerged as a stronger AI networking rival to Cisco following its acquisition of Juniper Networks, expanding its AI-native infrastructure portfolio. Integrating Aruba, GreenLake and Mist AI, HPE now delivers a robust edge-to-cloud stack. HPE’s deepening partnership with NVIDIA aims to simplify the deployment of enterprise generative AI through preconfigured, full-stack solutions. This strategic alignment positions HPE as a formidable challenger to Cisco’s legacy platforms in the fast-evolving AI and hybrid cloud landscape.
Arista Networks (ANET - Free Report) is a key AI networking competitor to Cisco, driven by its Ethernet-optimized AI platforms, EOS software and hyperscaler-focused architecture. Arista Networks projects second-quarter 2025 revenues of $2.1???billion, driven by strong growth momentum. Arista Networks' recent acquisition of VeloCloud expands its presence in the enterprise edge space. With advanced automation, telemetry and zero-touch operations, Arista Networks is well-positioned as a leading choice for AI-ready data center and edge networking solutions.
CSCO’s Price Performance, Valuation & Estimates
Shares of Cisco have gained 15.4% year to date compared with the Zacks Computer – Networking industry’s return of 14.6%.
CSCO’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CSCO appears overvalued, trading at a forward 12-month price-to-sales ratio of 4.58, slightly higher than the industry’s 4.45X. Cisco carries a Value Score of D.
CSCO’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.01 per share, up by a penny over the past 30 days and implying year-over-year growth of 5.99%.
Image Source: Zacks Investment Research
CSCO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.