Cisco Landed $4 Billion in AI Infrastructure Orders Last Quarter. Here’s What’s Next

Key Stats for CSCO Stock

• Past week performance: +1.7%
• 52-week range: $66 to $130
• Valuation model target price: $132
• Implied upside: +18.1% over 2.9 years

Translate Cisco’s AI infrastructure push into a long-term price target with TIKR’s Guided Valuation Model (It’s free) >>>

Cisco Builds Out Its AI Infrastructure Bet

Cisco Systems (CSCO) inched up 1.7% this week as the company kept expanding its push into AI infrastructure. On Monday, Cisco announced it is broadening its Secure AI Factory partnership with Nvidia through a new deal with Supermicro, adding rack-scale liquid- and air-cooled GPU compute systems to its product lineup starting in October. The move pushes Cisco beyond its traditional networking business into full rack-scale AI infrastructure, a market long dominated by Dell and HPE.

The expansion builds on Cisco’s strong fiscal Q4 report from mid-August, when the company posted revenue up 18% to $17.3 billion and non-GAAP EPS up 23% to $1.22, both of which beat estimates comfortably. Roughly $4 billion of that quarter’s orders came from AI infrastructure alone, with Silicon One switching revenue up 70% year over year as hyperscalers upgraded their AI data center networks.

Cisco also made its Cloud Control platform generally available for U.S. customers this week, with over 300 customers already onboarded and more than 5,000 on the global waitlist. The platform centralizes visibility across Cisco’s networking, security, and observability products, a move designed to keep enterprise customers inside Cisco’s ecosystem as IT operations grow more complex.

CEO Chuck Robbins has framed AI networking as Cisco’s next major growth chapter, though his own share sale this week, worth $2.4 million, was a routine transaction rather than a signal about the business. If CSCO stock continues to climb, the Supermicro partnership’s October launch becomes the next milestone to watch.

Map Cisco’s AI infrastructure trajectory yourself (It’s free) >>>

Is Cisco Stock Cheap Relative to Its AI Opportunity?

Under valuation model assumptions realized through 7/31/29, the stock is modeled using:

• Revenue Growth (CAGR): 9.7%
• Operating Margins: 35.4%
• Exit P/E Multiple: 16.6x

Based on these inputs, the model estimates a target price of $132, implying 18.1% total upside from the current share price and a 5.9% annualized return over 2.9 years.

That 5.9% annualized return falls below the 10% threshold TIKR generally uses to flag an attractive opportunity, placing Cisco closer to limited upside than a clear buy signal. The model’s 9.7% revenue growth assumption actually sits below Cisco’s own forward two-year revenue CAGR estimate of 10.8%, so the valuation is not stretching to justify its target.

Margins are Cisco’s clear strength. The company’s trailing EBIT margin already sits at 25.4%, and the model’s 35.4% assumption reflects continued operating leverage as AI infrastructure orders scale, a level Cisco has not yet reached but appears to be moving toward given record Q4 operating margins of 35.9% on a non-GAAP basis. A 16.6 times exit multiple looks conservative against Cisco’s current NTM P/E of 21.8x, suggesting the model assumes some multiple compression rather than expansion.

The risk case is straightforward. Cisco’s legacy networking business still grows slowly, and if AI infrastructure orders fail to sustain their current pace, the stock’s premium multiple could compress further than the model assumes.

Estimate a company’s fair value instantly (Free with TIKR) >>>

Cisco vs. Arista Networks: The AI Networking Fight

Arista Networks (ANET) is Cisco’s fiercest competitor in AI data center networking, and the two companies’ recent results highlight very different growth trajectories. The company posted Q2 2026 revenue of $3.036 billion. Revenue rose 37.7% year over year, more than double Cisco’s 8% growth. Its non-GAAP operating margin of 49.9% dwarfs Cisco’s own margin. Cisco reported a non-GAAP margin of 35.9% for the same period.

Arista has built its reputation squarely on high-performance AI and cloud networking solutions. Cisco brings a much broader portfolio spanning security, collaboration, and enterprise IT alongside networking. That breadth gives Cisco more diversified revenue streams across multiple technology segments. It also means AI networking represents a smaller slice of Cisco’s overall business. For Arista, AI networking accounts for a much larger share of total revenue.

Juniper Networks, now part of HPE following their merger, rounds out the competitive field. Its combined scale still trails both Cisco and Arista in pure AI networking share. Cisco’s bet on rack-scale infrastructure through Supermicro aims to close the growth gap. The move seeks to expand into adjacent, faster-growing markets beyond traditional networking gear.

Keep an eye on Q3 FY2026 earnings on May 13 for total AI orders taken, gross margin trends, and any update on hyperscaler demand >>>

What’s Driving CSCO Stock Going Forward?

The Supermicro partnership launch in October is the most immediate catalyst. Success would extend Cisco’s AI infrastructure offering beyond networking hardware into full rack-scale systems, directly competing with Dell and HPE for a larger share of AI data center budgets.

Silicon One adoption remains the clearest growth signal within Cisco’s existing business. The company already secured three new hyperscaler design wins last quarter, and continued wins would validate Cisco’s AI networking strategy against Arista’s faster growth.

Cloud Control’s rollout matters for customer retention. If the platform succeeds in centralizing enterprise IT operations, it strengthens Cisco’s competitive moat against point solution vendors chipping away at its traditional networking dominance.

Q1 fiscal 2027 earnings in mid-November will be the next checkpoint, with investors watching whether AI infrastructure orders sustain their current momentum and whether Silicon One revenue growth continues to accelerate.

Estimate a company’s fair value instantly (Free with TIKR) >>>

Should You Invest in Cisco?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up CSCO, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track CSCO alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

Analyze CSCO stock on TIKR Free→

Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!