"Shares of the networking giant in business for over 40 years surged more than 13% Thursday to an intraday record of $119.36, capping one of the most improbable turnaround stories in modern market history. The catalyst: a Q3 earnings report that showed CEO Chuck Robbins' multi-year bet on AI infrastructure is paying off. Record revenue of $15.8 billion, up 12% year-over-year, topped the high end of guidance. Management raised the FY26 AI revenue target to $4 billion (from $3 billion) and lifted AI orders guidance to $9 billion (from $5 billion)."
"Q4 revenue guidance of up to $16.9 billion came in above consensus, and non-GAAP operating income hit a record. The company also announced on Wednesday a Q4 workforce reduction of fewer than 4,000 jobs-less than 5% of total headcount. Cisco frames the cuts as an AI-driven strategic shift, which reallocates investment toward AI infrastructure, silicon, optics, and security, rather than AI directly replacing workers. Morningstar, which rates Cisco a wide moat, just raised fair value to $90 from $75."
"Cisco's comeback reflects a broader reckoning. BCG's research finds just 5% of companies are "AI future-built," capturing 5x the revenue gains and 3x the cost reductions of their peers. MIT Sloan's manufacturing study documented an "AI adoption J-curve"-short-term losses are steeper for older, established companies, but early adopters outperform peers on productivity and market share over four-plus-year horizons. Cisco's multi-year pivot is finally paying off, just as that pattern suggested."
Cisco shares rose more than 13% to an intraday record after a Q3 earnings report. Record revenue of $15.8 billion increased 12% year over year and exceeded guidance. Management raised the FY26 AI revenue target to $4 billion from $3 billion and lifted AI orders guidance to $9 billion from $5 billion. Q4 revenue guidance of up to $16.9 billion beat consensus, and non-GAAP operating income reached a record. Cisco also announced a Q4 workforce reduction of fewer than 4,000 jobs, framed as an AI-driven strategic shift toward AI infrastructure, silicon, optics, and security. Broader research points to an AI adoption pattern where early adopters gain productivity and market share over multi-year horizons.
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