Cisco Systems ( Cisco Systems , NASDAQ : CSCO ) will release its financial report for the first quarter of fiscal year 2027 on November 12. Wall Street expects revenue to be around $18.1 billion, with a surge in spending on artificial intelligence infrastructure driving up demand for networking equipment.
According to Cisco's official financial report announcement, the results will be released after the close of trading on Thursday, followed by a conference call at 4:30 p.m. Eastern Time.
Analysts expect that the adjusted earnings per share will be around $1.32 to $1.33, which is higher than the $1 from the same period last year. Supported by expanded data center investments and growing demand for corporate networks, revenue is expected to increase by about 22% year-on-year.
Cisco's $9.3 billion AI order paves the way for financial report testing
At the beginning of this quarter, Cisco's AI infrastructure business had already accumulated considerable momentum.
In the fiscal year 2026, the company received infrastructure orders worth $9.3 billion in AI from ultra-large-scale customers, with $4 billion of that amount acquired in just the fourth quarter.
Management expects that in the fiscal year 2027, the revenue from AI's infrastructure will be approximately $7.5 billion, which is higher than the about $4 billion in the fiscal year 2026.
This acceleration occurred after Cisco previously experienced a surge in AI orders, during which management raised its annual order forecasts.
Cisco's revenue in the last quarter was $17.3 billion, a year-on-year increase of 18%. Network orders grew by 40%, marking the eighth consecutive quarter of double-digit growth.
This trend reflects the growing demand in the market for high-speed Ethernet switches, optical connections, and network chips required to connect the increasingly powerful AI accelerators.
Can Cisco exceed its revenue forecast of $18.1 billion?
Cisco previously provided quarterly revenue guidance of $18 billion to $18.2 billion, with adjusted earnings per share ranging from $1.32 to $1.34.
This means that the gap between the company's outlook and analysts' expectations is not significant.
If revenue exceeds $1.811 billion, it will surpass one widely anticipated consensus estimate. However, the extent of exceeding expectations and the management's forward guidance may be even more important for the stock price of CSCO than the figure itself.
The company faces competition from semiconductor and network equipment suppliers, which also benefit from this round of infrastructure expansion.
Marvell recently announced a 46% increase in data center revenue, and its expanded cooperation with Google on AI chips also highlights the demand for dedicated connectivity solutions.
Broadcom ( Broadcom ) also raised its long-term AI semiconductor forecasts, further confirming the scale of investment in custom accelerators and network hardware.
AI Growth may compress Cisco's profit margins
Strong AI infrastructure sales may not necessarily translate directly into higher profitability.
Morgan Stanley recently downgraded Cisco's rating to “neutral,” citing that the profit margins on sales of hardware to ultra-large customers are lower than those of the company’s traditional enterprise products.
Cisco expects its adjusted gross margin to be between 65% and 66% in the first quarter, so profitability will become an important indicator to observe, just as much as revenue growth.
The tension between record-high demand and weakening tech valuations has already become apparent in the semiconductor and internet stocks sector. AI
