Cisco reported stronger-than-expected January-quarter results, surpassing forecasts and leading to a raised full-year outlook. The company significantly increased its fiscal 2026 AI order forecast to $5 billion, underscoring robust growth in this segment. Despite these positive developments, Cisco shares experienced a 7% dip post-earnings, driven by concerns over implied second-half margin compression and softer near-term AI orders. However, Morningstar analysts remain optimistic, raising their fair value estimate for Cisco to $75 per share. They view the current market concerns as short-term and having minimal impact on the company's long-term valuation. AI is projected to constitute 40% of Cisco's total growth in fiscal 2026, with revenues from AI expected to reach $11 billion by fiscal 2030, highlighting its pivotal role.
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