Cisco’s stock moved lower following the release of its fiscal fourth-quarter financial results, which surpassed analyst expectations on both earnings and revenue fronts. The company had entered the reporting period with significant investor optimism, with shares gaining more than 60% earlier in the year and approximately 8% during the month leading up to the announcement, driven by expectations that the networking equipment manufacturer would capture a larger share of artificial intelligence infrastructure spending.
The company’s financial performance reflected stronger-than-expected results across key metrics. Revenue in the most recent quarter reached levels that exceeded analyst consensus, with management projecting between $18 billion and $18.2 billion in revenue for the current period compared to the $16.8 billion average estimate. The company also provided earnings guidance for the current quarter that topped expectations and issued strong full-year projections.
A significant driver of Cisco’s growth came from major technology companies known as hyperscalers, which are leading the spending surge on artificial intelligence infrastructure. These firms placed $4 billion in infrastructure orders during the quarter, bringing their total orders for the fiscal year to $9.3 billion. Revenue from hyperscalers in the past fiscal year totaled approximately $4 billion, with company guidance suggesting this segment could nearly double to $7.5 billion in fiscal 2027.
In terms of overall financial results, the company’s quarterly revenue increased 18% from $14.7 billion in the prior year period. Net income rose 51% to $3.9 billion, or 97 cents per share, compared to $2.6 billion, or 64 cents per share, a year earlier. Despite these strong operational results, market reaction to the announcement resulted in downward pressure on the stock price during after-hours trading.
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