Cisco Pops 14% as CEO Declares Start of a ‘Networking Supercycle’
CNBC reported Thursday that Cisco shares rocketed 14%, heading for the company’s best single-session performance in more than two decades, after the networking giant shattered its own AI infrastructure order targets and dramatically upgraded its annual outlook.
Cisco Declares a Networking Supercycle
CEO Chuck Robbins told CNBC that surging artificial intelligence adoption is propelling the technology sector into a full-blown networking supercycle. The company raised its full-year AI-related order forecast from $5 billion to $9 billion, a figure that far exceeded what Wall Street and even Cisco’s own guidance had anticipated. Robbins described the market environment as moving at extraordinary speed, requiring the company to rapidly reallocate internal resources to match the pace of demand.
Alongside the bullish outlook, Cisco confirmed it will reduce its global workforce by roughly 5%. Management said the cuts are designed to shift headcount toward AI-focused divisions, including proprietary silicon and optical networking. Robbins indicated that many affected employees are likely to find roles in the very AI segments now drawing investment.
A Laggard No More
Cisco had spent much of the past year trailing hyperscaler-adjacent names in the AI infrastructure trade. That narrative has shifted considerably. The San Jose-based company recently crossed above price levels not seen since the dot-com boom, as investors recognized its core networking hardware as essential plumbing for the data centers powering large language models and AI workloads. The broadening of the AI trade beyond pure chip plays has worked directly in Cisco’s favor.
Visibility Challenges and Hyperscaler Ties
Robbins was candid about the forecasting difficulties that come with a fast-moving market. He acknowledged that locking in forward booking projections remains challenging, and said Cisco has selectively passed on certain hyperscaler projects. Despite that, he expressed confidence rooted in existing design wins and customers’ committed capital expenditure plans. The company is also participating in Anthropic’s Project Glasswing, a limited-access initiative that allows select enterprises to evaluate a new AI model and assess its cybersecurity implications. Robbins said conversations about the model are now happening with virtually every major customer, accelerating demand for security infrastructure upgrades.
What Analysts Will Watch Next
The key question for investors is whether Cisco can sustain this order trajectory through the second half of its fiscal year. The company’s ability to convert hyperscaler design wins into recurring revenue will be scrutinized closely when it next reports earnings. A workforce reduction paired with a near-doubling of the order forecast presents a high-conviction strategic bet that AI networking spending has entered a durable, multi-year expansion phase.
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