Cisco (NASDAQ: CSCO) is having a massive rally. The tech giant posted third-quarter results and guidance that beat expectations. For the quarter, Cisco’s EPS of $1.06 was above estimates of $1.04. Revenue of $15.84 billion was also above expectations of $15.56 billion.
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Moving forward, the company is forecasting fourth-quarter adjusted EPS of $1.16 to $1.18 per share on revenue of $16.7 billion to $16.9 billion. Analysts were looking for fourth-quarter adjusted EPS of $1.07 on revenue of $15.82 billion.
The strong guidance suggests enterprise customers are still spending aggressively on networking, cloud, and AI-related infrastructure despite ongoing macroeconomic uncertainty. That’s an important signal for investors worried that technology spending could slow in the second half of the year.
Cisco said it has received $5.3 billion in artificial intelligence infrastructure and hyperscaler orders so far this year and raised its expected fiscal-year orders to $9 billion, up from $5 billion. Better, as noted by CEO Chuck Robbins:
“The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest. I’m confident Cisco will be one of those winners. This means making hard decisions — about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.”
The AI Boom Shows No Signs of Cooling
Fueling more upside in the stock, the AI boom shows no clear signs of cooling off. In fact, the artificial intelligence boom is still accelerating.
With the global AI market already surpassing $230 billion in 2024, analysts now see a clear path to multi-trillion-dollar expansion—and the next five years may deliver the strongest gains yet.
Forecasts now place AI’s value between $1.7 and $3.5 trillion by the early 2030s, with the most aggressive estimates topping $7 trillion by 2035. And judging by the surge in corporate investment, the market is moving toward the high end of those projections.
Warnings of an “AI bubble” are increasingly being dismissed by top analysts.
Goldman Sachs says, “it believes the AI story is just getting started – and the investments that seem huge today will be dwarfed by the benefits AI will deliver,” as noted by Quartz.com.
That matters because investor sentiment toward AI stocks has recently become more cautious after massive gains over the last two years. Strong enterprise demand and rising infrastructure spending continue to support the longer-term growth narrative.
Long term, the investment bank says that AI adoption could add $20 trillion to the U.S. economy. AI, according to Goldman Sachs, is already delivering those gains in productivity when deployed right.”
JPMorgan added, “AI is presenting opportunities not fully appreciated or understood yet,” as noted by CNBC. “AI itself is not a bubble. That’s a crazy concept… We are on the precipice of a major, major revolution in the way that companies operate.”
“So, if you say to yourself, is AI in a bubble, I feel you have to get very granular on how you’re going to answer that, because in the U.S., we’re starting to gain traction, but we’re nowhere near the ability to have the stuff all to the bottom line.”
For investors, that means the upside potential is still there, which is why stocks like Cisco can continue to explode higher.
Cisco Emerges as a Clear AI Infrastructure Beneficiary
Cisco’s latest earnings report reinforces a growing trend across the tech sector: artificial intelligence is no longer a future opportunity — it’s a present-day revenue driver.
With surging AI infrastructure demand, strong guidance, and billions in new orders already secured, Cisco appears well-positioned to capitalize on one of the biggest technology transformations in decades.
And with Wall Street giants like Goldman Sachs and JPMorgan arguing that the AI revolution is still in its early innings, investors may continue rewarding companies that can successfully scale alongside the boom. For now, Cisco looks like one of the clearest beneficiaries of that momentum.
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