Cisco’s stock fell nearly 7% in extended trading despite reporting better-than-expected quarterly results, as the company’s guidance for the current period came in flat with analyst expectations. Revenue and net income both exceeded forecasts, but weak forward-looking guidance weighed heavily on investor sentiment. For the quarter, Cisco reported revenue of $14 billion, a 10% increase compared to the same period last year. Net income rose to $3.18 billion, or 80 cents per share, up from $2.43 billion, or 61 cents per share, a year earlier. The adjusted earnings figure, which excludes stock-based compensation, was 80 cents per share, beating the LSEG consensus of 79 cents. For the current fiscal quarter, Cisco forecast adjusted earnings per share of $1.02 to $1.04 and revenue between $15.4 billion and $15.6 billion. Analysts had expected $1.03 per share and $15.18 billion in revenue—meaning the outlook met, but did not exceed, expectations. Investors had hoped Cisco would show stronger momentum in the artificial intelligence boom, which has driven growth for chipmakers and data center infrastructure providers. While Cisco is gaining traction in AI infrastructure, its growth remains cautious. The company reported $2.1 billion in AI-related infrastructure orders from hyperscalers during the quarter, signaling growing demand. Core networking revenue surged 21% year-over-year to $8.3 billion, surpassing the StreetAccount forecast of $7.9 billion. Cisco also announced a collaboration with Advanced Micro Devices to deliver AI infrastructure in Saudi Arabia and unveiled a new networking switch equipped with an Nvidia chip, underscoring its push into AI-optimized hardware. CEO Chuck Robbins addressed investor concerns about macroeconomic headwinds, noting that sovereign cloud initiatives—government-backed cloud projects—are not expected to significantly impact results in fiscal year 2026. “There’s really no real need nor expectation for meaningful impact in FY26,” he said, calling any such contributions “purely upside.” He added that growth from neoclouds—newer, agile cloud providers distinct from giants like Amazon and Microsoft—is expected to ramp up in the second half of the current fiscal year and gain momentum in fiscal 2027. Rising memory prices, driven by surging demand for Nvidia GPUs, have pressured equipment margins across the industry. Cisco has responded with price increases and revised contracts with channel partners. Robbins acknowledged some customers might buy ahead, but downplayed the risk of a major inventory buildup in the networking segment. Looking ahead, Cisco is targeting adjusted earnings per share of $4.13 to $4.17 for fiscal year 2026, along with revenue of $61.2 billion to $61.7 billion—representing an 8.5% growth rate. The LSEG consensus projected $4.12 per share and $60.74 billion in revenue, indicating Cisco’s outlook is slightly above market expectations.