Home / Business and Economy / Cisco's AI Surge: Hardware Powers $7.5B Revenue
Cisco's AI Surge: Hardware Powers $7.5B Revenue
10 Nov
Summary
- Cisco's AI-related revenue from hyperscalers is projected to reach $7.5 billion in FY27.
- The company's stock has gained nearly 30% year-to-date, outpacing major indexes.
- Cisco offers a dividend yield approaching 2%, a rare income opportunity among AI tech firms.
Cisco Systems is a key player in the current AI infrastructure buildout, with its stock showing resilience despite a recent tech sector downturn. The company is set to report strong fiscal first-quarter results, with revenue projected to increase nearly 22% year-over-year.
This growth is significantly fueled by accelerating demand for AI networking hardware. Cisco secured $9.3 billion in AI infrastructure orders in fiscal 2026 and anticipates AI-related revenue from hyperscalers to reach $7.5 billion in its current fiscal year 2027.
Despite the AI boom, Cisco's valuation is considered reasonable, trading at approximately 20 times forward earnings. The company also provides an attractive income opportunity with a quarterly dividend yielding close to 2%, making it a compelling choice for investors looking to capitalize on AI growth.
With a Zacks Rank #2 (Buy), Cisco Systems offers an attractive way to invest in AI infrastructure without the high valuations often seen in semiconductor and software stocks. Continued revenue growth and healthy margins will be crucial for maintaining its upward momentum.
