Cisco Posts Record Revenue on $2.1B AI Orders
Network giant beats Q2 estimates with $15.3B revenue and 10% growth. AI infrastructure orders from hyperscalers hit $2.1B as data center buildout accelerates.
Cisco delivered a quarter that shows the AI infrastructure boom extends well beyond GPU makers. The networking giant reported record revenue of $15.3 billion for fiscal Q2 2026, up 10% year over year and ahead of the $15.11 billion analysts expected.
Earnings per share came in at $1.04 adjusted, beating the $1.02 consensus. GAAP EPS hit $0.80, a 31% increase from the prior year. Both gross margin and operating margin topped the high end of guidance ranges.
But the standout number wasn't in the income statement. It was in the order book: $2.1 billion in AI infrastructure orders from hyperscalers, representing what CEO Chuck Robbins called a "significant acceleration" in demand.
The AI Infrastructure Angle
Cisco isn't building the GPUs that power AI training. But it's building the networks that connect them—and that business is surging.
AI data centers require different networking architectures than traditional cloud deployments. The bandwidth demands are extraordinary. Moving training data between thousands of GPUs generates network traffic that overwhelms conventional switches. Cisco's high-bandwidth Ethernet solutions are capturing that spend.
Product orders rose 18% year over year, with networking specifically accelerating to more than 20% growth. That's a notable inflection for a company that spent years battling the perception that software-defined networking would commoditize its hardware.
| Metric | Q2 FY26 | YoY Change |
|---|---|---|
| Revenue | $15.3B | +10% |
| Adjusted EPS | $1.04 | +11% |
| GAAP EPS | $0.80 | +31% |
| Product Orders | -- | +18% |
Hyperscaler Relationships Deepen
The $2.1 billion in AI infrastructure orders came from hyperscale customers—the Amazons, Googles, Metas, and Microsofts of the world. These companies are collectively spending north of $650 billion on infrastructure this year, and Cisco is capturing a larger slice than many expected.
It's a validation of the company's strategy shift under Robbins. Rather than fighting hyperscalers who build custom networking gear, Cisco partnered with them. The approach is working: AI-related orders that were negligible two years ago now represent a meaningful growth driver.
Management noted that AI infrastructure orders have roughly doubled sequentially for the past two quarters. If that trajectory continues, Cisco's AI business could rival some of its legacy enterprise segments by year-end.
Software Progress
The hardware resurgence doesn't mean Cisco has abandoned its software push. Annual recurring revenue from software subscriptions continues to climb, and the company's security portfolio—bolstered by acquisitions—is gaining traction.
But this quarter was about hardware. And specifically about the hardware that connects AI infrastructure. In a market obsessed with Nvidia, Cisco showed there's serious money to be made in the supporting cast.
Stock Reaction
Shares traded lower in after-hours trading despite the beat. The pattern mirrors other recent earnings reactions—strong results followed by profit-taking as investors question whether the good news is priced in.
Cisco has rallied significantly off its 2024 lows, and at 17x forward earnings, it's not cheap by its historical standards. The AI infrastructure narrative has legs, but the market wants to see sustained acceleration before rewarding the stock further.
What Matters Going Forward
The key question is durability. Hyperscaler spending is lumpy—big orders come in waves tied to data center construction schedules. Cisco's Q2 was clearly a strong wave. The question is whether Q3 and Q4 sustain the momentum or normalize.
Management guided for continued strength but didn't provide specific AI order targets. Watch the order growth commentary closely when the conference call transcript drops.
For networking stocks more broadly, Cisco's results are a positive signal. If the market leader is seeing this kind of AI-driven demand, competitors like Arista Networks—which reports Thursday—should benefit from similar tailwinds.