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For the first quarter of fiscal 2027, Cisco Systems expects revenues between $18 billion and $18.2 billion. Non-GAAP earnings are projected to be in the range of $1.32-$1.34 per share.
The Zacks Consensus Estimate for Cisco Systems' first-quarter fiscal 2027 revenues is pegged at $18.09 billion, suggesting 21.54% year-over-year growth. The consensus mark for first-quarter fiscal 2027 earnings is pegged at $1.33 per share, which has been unchanged over the past 30 days and indicates 33% growth over the year-ago quarter’s reported figure.
CSCO’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 2.55%.
Let’s see how things have shaped up prior to this announcement.
Key Factors to Note for CSCO’s Q1 Earnings
Cisco Systems' fiscal first-quarter 2027 performance is expected to have benefited from strong demand for artificial intelligence (AI) infrastructure, growing hyperscaler investments and continued enterprise network modernization. Increasing adoption of agentic AI is driving demand for high-performance networking solutions across cloud, on-premises and edge environments. Cisco Systems' expanding portfolio of networking, security and observability solutions is expected to have supported revenue growth in the to-be-reported quarter.
AI infrastructure spending by hyperscalers is expected to have remained a major growth driver. Cisco Systems secured $4 billion in hyperscaler AI infrastructure orders in the fourth quarter of fiscal 2026, bringing full-year orders to $9.3 billion. Growing adoption of Silicon One-based systems, Acacia optics and high-performance networking solutions is likely to have supported revenues. The company’s expanding design wins with hyperscalers remain noteworthy.
Enterprise networking demand is expected to have strengthened Cisco Systems' performance. Increasing investments in data center modernization, campus networking and AI-ready infrastructure are likely to have driven demand for switching, routing and wireless solutions. Data center networking orders increased by more than 35% in the fourth quarter of fiscal 2026, while campus networking orders grew 20%. Strong adoption of Wi-Fi 7 and next-generation switches is expected to have sustained this momentum.
Cisco Systems' security business is expected to have benefited from increasing cybersecurity spending and growing adoption of its integrated security offerings. Rising demand for Secure Access, XDR, Hypershield, AI Defense and firewall solutions is likely to have supported growth. Strengthening Splunk adoption and integration with Cisco Systems' broader security portfolio are additional positives. Management anticipates mid-to-high-single-digit security revenue growth in the to-be-reported quarter.
However, Cisco Systems' first-quarter fiscal 2027 performance is expected to have faced pressure from rising memory costs and a higher mix of lower-margin hardware revenues, potentially weighing on gross margins. The company is also suffering from stiff competition from Arista Networks (ANET - Free Report) , Dell Technologies (DELL - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) across AI networking and enterprise security domains.
CSCO Shares Outperform Sector
Cisco Systems’ shares have appreciated 28.1% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 4.1%.
However, CSCO’s shares have underperformed Arista Networks, Dell Technologies and Hewlett-Packard Enterprise YTD. Shares of Dell Technologies, Arista Networks and Hewlett-Packard have appreciated 175.1%, 42.1% and 98%, respectively.
CSCO Stock Performance
Image Source: Zacks Investment Research
The Value Score of F suggests a stretched valuation for Cisco at this moment.
In terms of the forward 12-month price/sales, CSCO is trading at 5.3X, higher than the broader sector’s 4.84X, Dell Technologies’ 0.99X and Hewlett Packard Enterprise’s 1.15X, but lower than Arista Networks’ 13.43X.
CSCO Valuation
Image Source: Zacks Investment Research
Cisco Rides on Strong Portfolio & AI Demand
Cisco Systems’ long-term prospects remain promising, driven by its diversified networking, security, observability and collaboration portfolio, alongside rising investments in AI infrastructure.
Strong AI infrastructure demand remains a key growth catalyst. The company expects AI infrastructure revenues from hyperscalers to reach $7.5 billion in fiscal 2027, supported by growing demand and market share gains. Increasing adoption of its Silicon One P200 and G200 systems, alongside expanding opportunities in scale-out and scale-across networking, should further strengthen its growth trajectory.
Cisco Systems’ security and observability businesses offer substantial growth opportunities as enterprises increasingly prioritize protection against AI-related cyber threats. The integration of Splunk with Cisco Systems security portfolio, alongside growing adoption of Hypershield, AI Defense and Secure Access, should support cross-selling opportunities and recurring revenue growth. Management expects security and observability revenues to grow at a high-single-digit rate in fiscal 2027.
Conclusion
Cisco Systems’ first-quarter fiscal 2027 results are likely to reflect strong AI infrastructure momentum, robust networking demand and an expanding security portfolio. Rising hyperscaler investments, growing adoption of Silicon One and improving Splunk momentum further strengthen its growth prospects. These factors justify its premium valuation.
View the Zacks #1 Rank List
Image: Bigstock
Should You Buy, Sell, or Hold Cisco Systems Stock Before Q1 Earnings?
Key Takeaways
Cisco Systems (CSCO - Free Report) is set to release its first-quarter fiscal 2027 results on Nov. 12.
For the first quarter of fiscal 2027, Cisco Systems expects revenues between $18 billion and $18.2 billion. Non-GAAP earnings are projected to be in the range of $1.32-$1.34 per share.
The Zacks Consensus Estimate for Cisco Systems' first-quarter fiscal 2027 revenues is pegged at $18.09 billion, suggesting 21.54% year-over-year growth. The consensus mark for first-quarter fiscal 2027 earnings is pegged at $1.33 per share, which has been unchanged over the past 30 days and indicates 33% growth over the year-ago quarter’s reported figure.
CSCO’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 2.55%.
Cisco Systems, Inc. Price and EPS Surprise
Cisco Systems, Inc. price-eps-surprise | Cisco Systems, Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Key Factors to Note for CSCO’s Q1 Earnings
Cisco Systems' fiscal first-quarter 2027 performance is expected to have benefited from strong demand for artificial intelligence (AI) infrastructure, growing hyperscaler investments and continued enterprise network modernization. Increasing adoption of agentic AI is driving demand for high-performance networking solutions across cloud, on-premises and edge environments. Cisco Systems' expanding portfolio of networking, security and observability solutions is expected to have supported revenue growth in the to-be-reported quarter.
AI infrastructure spending by hyperscalers is expected to have remained a major growth driver. Cisco Systems secured $4 billion in hyperscaler AI infrastructure orders in the fourth quarter of fiscal 2026, bringing full-year orders to $9.3 billion. Growing adoption of Silicon One-based systems, Acacia optics and high-performance networking solutions is likely to have supported revenues. The company’s expanding design wins with hyperscalers remain noteworthy.
Enterprise networking demand is expected to have strengthened Cisco Systems' performance. Increasing investments in data center modernization, campus networking and AI-ready infrastructure are likely to have driven demand for switching, routing and wireless solutions. Data center networking orders increased by more than 35% in the fourth quarter of fiscal 2026, while campus networking orders grew 20%. Strong adoption of Wi-Fi 7 and next-generation switches is expected to have sustained this momentum.
Cisco Systems' security business is expected to have benefited from increasing cybersecurity spending and growing adoption of its integrated security offerings. Rising demand for Secure Access, XDR, Hypershield, AI Defense and firewall solutions is likely to have supported growth. Strengthening Splunk adoption and integration with Cisco Systems' broader security portfolio are additional positives. Management anticipates mid-to-high-single-digit security revenue growth in the to-be-reported quarter.
However, Cisco Systems' first-quarter fiscal 2027 performance is expected to have faced pressure from rising memory costs and a higher mix of lower-margin hardware revenues, potentially weighing on gross margins. The company is also suffering from stiff competition from Arista Networks (ANET - Free Report) , Dell Technologies (DELL - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) across AI networking and enterprise security domains.
CSCO Shares Outperform Sector
Cisco Systems’ shares have appreciated 28.1% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 4.1%.
However, CSCO’s shares have underperformed Arista Networks, Dell Technologies and Hewlett-Packard Enterprise YTD. Shares of Dell Technologies, Arista Networks and Hewlett-Packard have appreciated 175.1%, 42.1% and 98%, respectively.
CSCO Stock Performance
Image Source: Zacks Investment Research
The Value Score of F suggests a stretched valuation for Cisco at this moment.
In terms of the forward 12-month price/sales, CSCO is trading at 5.3X, higher than the broader sector’s 4.84X, Dell Technologies’ 0.99X and Hewlett Packard Enterprise’s 1.15X, but lower than Arista Networks’ 13.43X.
CSCO Valuation
Image Source: Zacks Investment Research
Cisco Rides on Strong Portfolio & AI Demand
Cisco Systems’ long-term prospects remain promising, driven by its diversified networking, security, observability and collaboration portfolio, alongside rising investments in AI infrastructure.
Strong AI infrastructure demand remains a key growth catalyst. The company expects AI infrastructure revenues from hyperscalers to reach $7.5 billion in fiscal 2027, supported by growing demand and market share gains. Increasing adoption of its Silicon One P200 and G200 systems, alongside expanding opportunities in scale-out and scale-across networking, should further strengthen its growth trajectory.
Cisco Systems’ security and observability businesses offer substantial growth opportunities as enterprises increasingly prioritize protection against AI-related cyber threats. The integration of Splunk with Cisco Systems security portfolio, alongside growing adoption of Hypershield, AI Defense and Secure Access, should support cross-selling opportunities and recurring revenue growth. Management expects security and observability revenues to grow at a high-single-digit rate in fiscal 2027.
Conclusion
Cisco Systems’ first-quarter fiscal 2027 results are likely to reflect strong AI infrastructure momentum, robust networking demand and an expanding security portfolio. Rising hyperscaler investments, growing adoption of Silicon One and improving Splunk momentum further strengthen its growth prospects. These factors justify its premium valuation.
CSCO currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.