❯ Cisco revenue rises 24% as it lifts hyperscaler AI revenue expectations to $9 billion

Networking demand lifts resultsCisco reported fiscal first-quarter 2027 revenue of $18.5 billion on November 12, up 24% for the period ended October 24. Adjusted EPS rose 40% to $1.40. Both exceeded the $18.14 billion revenue and $1.33 EPS estimates compiled by Reuters.

More computing requires more connectionsNetworking revenue grew 43%, substantially faster than Cisco’s other major product categories. Large AI clusters require switches, routers and related equipment to connect computing systems, extending infrastructure demand beyond processors. Cisco raised expected fiscal 2027 AI infrastructure revenue from hyperscalers to $9 billion from $7.5 billion, compared with about $4 billion in the previous fiscal year.

A stronger outlook meets component inflationThe company lifted annual revenue guidance from $72.2–$73.4 billion to $74.8–$75.8 billion. However, Reuters notes that higher memory and other component prices are increasing hardware costs. Adjusted gross margin was 65.6%, down from 68.1% a year earlier. How much networking growth translates into profit will also depend on procurement costs and product mix.

▮ SIGNALAI clusters are directing spending toward networking, while component inflation pressures hardware margins; Cisco’s opportunity depends on the gap between new connectivity demand and procurement costs.