Cisco Stock Surges 14% as CEO Declares Start of a Networking Supercycle

CNBC reported Thursday that Cisco shares surged 14% — their strongest single-session gain in over 20 years — after the networking giant blew past its annual AI infrastructure and hyperscaler order targets. CEO Chuck Robbins told the network that explosive appetite for AI tools and equipment is pulling the industry into a networking supercycle.

Orders Blow Past Guidance

Cisco entered fiscal 2026 with an AI-related order target of $5 billion. It is now guiding for $9 billion, a dramatic upward revision that caught Wall Street off guard. The San Jose-based company also announced plans to reduce headcount by roughly 5% as it reallocates resources toward AI-focused business lines, custom silicon, and optical networking components.

Robbins told CNBC the pace of market change demanded swift internal action. He added that many workers affected by the cuts are expected to find roles within the AI-driven segments the company is now prioritizing.

Also Read: What the US-China Trade Truce Means for Tech Supply Chains

Background — Playing Catch-Up to Hyperscalers

Cisco spent much of the past two years trailing hyperscaler-adjacent hardware names as investors concentrated AI gains in a narrow group of companies led by Nvidia. The networking company’s shares only recently crossed levels last seen during the dot-com boom, a milestone that underscored how long the recovery took. Thursday’s move reflects a broadening of the AI infrastructure trade beyond chipmakers and cloud platforms, extending into the switches, routers, and optical gear that data centers require to function at scale.

Also Read: Nvidia’s Data Center Revenue Hit a New Record Last Quarter

Visibility Remains Limited Despite Strong Signals

Robbins acknowledged to CNBC that the fast-moving nature of AI capital spending makes precise forward booking guidance difficult. The company has even walked away from certain hyperscaler projects that did not meet its criteria. Still, he said existing design wins and clients’ stated capital commitments give management confidence in the updated outlook.

Cisco is also navigating the cybersecurity implications of next-generation AI models. The company participates in Anthropic’s Project Glasswing, a select program that gave enterprise partners early access to a new model last month. Robbins said Cisco is now discussing that model’s security considerations with virtually every client it serves, as businesses scramble to harden their defenses against AI-enabled threats.

The stock’s move Thursday lifted Cisco’s market capitalization by tens of billions of dollars in a single session.

Read Next: Palo Alto Networks Warns AI-Driven Cyberattacks Will Become the New Norm