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Cisco Gains From AI Networking Boom: Can It Outpace HPE & ANET?
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Key Takeaways
Cisco's AI infrastructure orders hit $9.3B in fiscal 2026, with revenues projected to be $7.5B in 2027.
CSCO's networking revenues surged 28% in fiscal Q4 2026, fueled by strong AI infrastructure demand.
Cisco faces competition as Arista targets $3.6B in AI revenues and HPE expands its networking business.
Cisco Systems (CSCO - Free Report) is benefiting from accelerating investments in artificial intelligence (AI) infrastructure, hyperscaler demand and enterprise network modernization. The growing adoption of agentic AI is driving demand for high-bandwidth, low-latency networking solutions, strengthening Cisco’s competitive position against Hewlett Packard (HPE - Free Report) and Arista Networks (ANET - Free Report) .
Cisco’s AI infrastructure orders from hyperscalers reached $9.3 billion in fiscal 2026, approximately 4.5 times the fiscal 2025 level. The company expects AI infrastructure revenues from hyperscalers to reach $7.5 billion in fiscal 2027. Its Silicon One architecture, Acacia optical technologies and next-generation switching platforms are helping capture opportunities across scale-out and scale-across AI networking deployments.
In the fourth quarter of fiscal 2026, networking revenues increased 28% year over year, supported by triple-digit AI infrastructure growth. Networking orders surged 40%, while data-center networking orders increased more than 35%. Strong campus networking demand, Wi-Fi 7 adoption and enterprise infrastructure refreshes further strengthen its prospects.
The company’s expanding portfolio has been noteworthy. CSCO recently expanded its Cisco 360 Partner Program with new incentives, Ecosystem Deal Registration and AI-powered tools to strengthen partner profitability and customer engagement. The company announced the general availability of Cisco IQ for Partners, enabling resellers and managed service providers to leverage real-time intelligence, automate operations and identify modernization opportunities. Cisco also enhanced its Cloud Control platform with AgenticOps capabilities, including Model Foundry, ThousandEyes integration and Model Context Protocol servers. The company also introduced quantum-resilient Wi-Fi 7 access points and expanded Live Protect capabilities to strengthen enterprise security and support AI-ready infrastructure.
Cisco’s expanding AI networking portfolio, strong hyperscaler traction and partner ecosystem position it favorably to capitalize on emerging opportunities and compete effectively with Hewlett Packard and Arista Networks. For the first quarter of fiscal 2027, Cisco expects revenues between $18 billion and $18.2 billion.
How Competitors Fare Against CSCO
Cisco is facing stiff competition from Arista Networks and Hewlett Packard in the AI networking domain.
Arista strengthens its position in AI networking as enterprises and hyperscale customers expand Ethernet-based AI infrastructure. During the second quarter of 2026, the company exceeded 100 cumulative AI fabric customers using Etherlink switches compared with only a handful of early adopters in 2024. Management also expects AI revenues to reach at least $3.6 billion in 2026, supported by scale-up, scale-out and scale-across deployments.
Hewlett Packard is benefiting from a broader shift toward AI infrastructure, networking modernization and hybrid cloud, with Juniper expanding its addressable market and integration synergies supporting earnings growth. The Juniper acquisition is broadening HPE’s reach across campus and branch, data center switching, routing and security, while integration remains ahead of schedule.
In the third quarter of fiscal 2026, Networking revenues were $2.9 billion, up 10% on a normalized basis, and operating margin was 22%. Networks for AI orders reached $700 million in the quarter and $2.2 billion cumulatively, prompting HPE to raise its fiscal 2026 year-end target to $2.5 billion-$3.0 billion. HPE now expects fiscal 2026 Networking revenue growth of 73% to 74%.
Cisco shares have gained 43.2% year to date, outperforming the broader Zacks Computer and Technology sector’s 16.5% increase.
CSCO Stock’s Price Performance
Image Source: Zacks Investment Research
CSCO stock is trading at a premium, with a forward 12-month price/sales of 5.94X compared with the Zacks Computer and Technology sector’s 5.57X. Cisco has a Value Score of F.
CSCO Stock Is Overvalued
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 earnings is currently pegged at $5.11 per share, which has been unchanged over the past 30 days. This suggests 18.01% growth from the year-ago quarter.
View the Zacks #1 Rank List
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Cisco Gains From AI Networking Boom: Can It Outpace HPE & ANET?
Key Takeaways
Cisco Systems (CSCO - Free Report) is benefiting from accelerating investments in artificial intelligence (AI) infrastructure, hyperscaler demand and enterprise network modernization. The growing adoption of agentic AI is driving demand for high-bandwidth, low-latency networking solutions, strengthening Cisco’s competitive position against Hewlett Packard (HPE - Free Report) and Arista Networks (ANET - Free Report) .
Cisco’s AI infrastructure orders from hyperscalers reached $9.3 billion in fiscal 2026, approximately 4.5 times the fiscal 2025 level. The company expects AI infrastructure revenues from hyperscalers to reach $7.5 billion in fiscal 2027. Its Silicon One architecture, Acacia optical technologies and next-generation switching platforms are helping capture opportunities across scale-out and scale-across AI networking deployments.
In the fourth quarter of fiscal 2026, networking revenues increased 28% year over year, supported by triple-digit AI infrastructure growth. Networking orders surged 40%, while data-center networking orders increased more than 35%. Strong campus networking demand, Wi-Fi 7 adoption and enterprise infrastructure refreshes further strengthen its prospects.
The company’s expanding portfolio has been noteworthy. CSCO recently expanded its Cisco 360 Partner Program with new incentives, Ecosystem Deal Registration and AI-powered tools to strengthen partner profitability and customer engagement. The company announced the general availability of Cisco IQ for Partners, enabling resellers and managed service providers to leverage real-time intelligence, automate operations and identify modernization opportunities. Cisco also enhanced its Cloud Control platform with AgenticOps capabilities, including Model Foundry, ThousandEyes integration and Model Context Protocol servers. The company also introduced quantum-resilient Wi-Fi 7 access points and expanded Live Protect capabilities to strengthen enterprise security and support AI-ready infrastructure.
Cisco’s expanding AI networking portfolio, strong hyperscaler traction and partner ecosystem position it favorably to capitalize on emerging opportunities and compete effectively with Hewlett Packard and Arista Networks. For the first quarter of fiscal 2027, Cisco expects revenues between $18 billion and $18.2 billion.
How Competitors Fare Against CSCO
Cisco is facing stiff competition from Arista Networks and Hewlett Packard in the AI networking domain.
Arista strengthens its position in AI networking as enterprises and hyperscale customers expand Ethernet-based AI infrastructure. During the second quarter of 2026, the company exceeded 100 cumulative AI fabric customers using Etherlink switches compared with only a handful of early adopters in 2024. Management also expects AI revenues to reach at least $3.6 billion in 2026, supported by scale-up, scale-out and scale-across deployments.
Hewlett Packard is benefiting from a broader shift toward AI infrastructure, networking modernization and hybrid cloud, with Juniper expanding its addressable market and integration synergies supporting earnings growth. The Juniper acquisition is broadening HPE’s reach across campus and branch, data center switching, routing and security, while integration remains ahead of schedule.
In the third quarter of fiscal 2026, Networking revenues were $2.9 billion, up 10% on a normalized basis, and operating margin was 22%. Networks for AI orders reached $700 million in the quarter and $2.2 billion cumulatively, prompting HPE to raise its fiscal 2026 year-end target to $2.5 billion-$3.0 billion. HPE now expects fiscal 2026 Networking revenue growth of 73% to 74%.
CSCO’s Share Price Performance, Valuation & Estimates
Cisco shares have gained 43.2% year to date, outperforming the broader Zacks Computer and Technology sector’s 16.5% increase.
CSCO Stock’s Price Performance
Image Source: Zacks Investment Research
CSCO stock is trading at a premium, with a forward 12-month price/sales of 5.94X compared with the Zacks Computer and Technology sector’s 5.57X. Cisco has a Value Score of F.
CSCO Stock Is Overvalued
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 earnings is currently pegged at $5.11 per share, which has been unchanged over the past 30 days. This suggests 18.01% growth from the year-ago quarter.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote
Cisco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.