News about Cisco

Cisco Systems (CSCO) has expanded its AI infrastructure role with new Silicon One hardware and an optical partnership with NVIDIA aimed at ultra-dense 400Gb/s-per-lane modules for future AI data centers. The share price is up 40.06% year to date, though its 90-day share price return fell 7.86%, and long-term total shareholder returns exceed 100%. The stock trades around US$106.50. A narrative most followed on Simply Wall St puts fair value at $110.56, implying a mild discount, but the case depends on AI execution and hyperscaler demand, and any slowdown or share loss there could narrow the upside.

Cisco announced high-density AI networking hardware, including Silicon One G302 switches and a planned 400Gb/s-per-lane USFP optical module co-developed with NVIDIA, TE Connectivity and Amphenol, along with expanded SONiC support and security tooling for AI operations. The article argues these updates reinforce the case for converting Cisco's US$9.3b of FY26 hyperscale AI orders into revenue, but do not change that near-term driver. The main risk remains margins: non-GAAP gross margin fell 210 basis points year over year to 66.3%, and management flags further pressure through FY27 from hardware intensity and memory costs. Cisco guides to US$7.5b of hyperscaler AI infrastructure revenue in FY27, and networking accounts for 54.7% of total sales.

Arista Networks (ANET) and Cisco Systems (CSCO) both reported record AI-driven results in August, yet their stocks sold off sharply. Arista's revenue reached $3.04B, up 37.7% year over year and above the $2.83B estimate, and it raised its 2026 outlook to about $12.6 billion. Cisco's networking revenue rose 28% to $9.791B, and hyperscaler AI orders hit $4 billion in the quarter. Arista focuses on a product line built on EOS software and faces customer concentration risk, while Cisco controls more of its own supply chain, though its non-GAAP gross margin slipped to 66.3% from 68.4%. The article notes Arista's gross margin target of 62% to 64%, and that last week Arista fell 11.41% and Cisco fell 7.27%.