Cisco Targets $9B AI Orders, Up from $5B—Stock Up 60% in 2026

Cisco Systems has become one of 2026's major AI trades, with shares up 60% so far this year and closing Tuesday at $121.74, about 7% below its 52-week high of $130.37. The driver is a $9 billion target for AI infrastructure orders from hyperscalers (giant cloud companies building AI data centers) in fiscal 2026—a figure Cisco raised from $5 billion during its fiscal third-quarter earnings call in May.

The order momentum is both real and accelerating. In its fiscal third quarter (ended April 25), Cisco booked $1.9 billion in AI infrastructure orders from hyperscalers, more than triple the $600 million from the same quarter a year earlier. This single quarter brought the year-to-date total to $5.3 billion, already exceeding the original full-year target of $5 billion with one quarter remaining. For context, fiscal 2025 (the year just ended) saw about $2 billion of such orders—double the company's original $1 billion target—illustrating how dramatically demand has accelerated. The growth spans multiple product lines. Cisco's Acacia optics business, which manufactures high-speed optical connections for data centers, posted its strongest quarter to date with more than $1 billion of orders in fiscal Q3 and is on track to grow more than 200% year over year in fiscal 2026.

The fiscal Q3 quarter itself was strong beyond orders. Cisco's total revenue hit a record $15.8 billion, up 12% from a year earlier, and non-GAAP adjusted earnings per share came in at $1.06, up 10%. Both figures exceeded the high end of the company's guidance. For fiscal 2026 overall, Cisco guided for revenue growth of about 11% on full-year revenue of $62.8 billion to $63.0 billion, up from fiscal 2025's $56.7 billion. Adjusted earnings per share are guided between $4.27 and $4.29, up about 12%.

Yet the math reveals important constraints. Orders and revenue are not the same: Cisco expects to recognize only about $4 billion of the $9 billion AI infrastructure order target as revenue in fiscal 2026, with the remainder converting to revenue in later periods. That $4 billion represents roughly 6% of Cisco's total guided fiscal 2026 revenue. The company's core business—campus networking, cybersecurity, collaboration, service provider gear—still generates the base rate of growth; the AI orders accelerate growth from what would otherwise be mid-single digits to low double digits but cannot make a company this size grow like a pure AI supplier. The stock now trades at about 26 times forward earnings, with a dividend yield of about 1.4% annually per share of $1.68—roughly half the yield at the stock's 52-week low. For this valuation to be justified, the AI order book must compound well past fiscal 2026 and orders must convert to revenue on schedule. Cisco's fiscal year ended in late July, making the $9 billion target no longer a forecast but a result to be reported. The company is scheduled to release its fiscal fourth-quarter results on Wednesday, August 12.