Cisco Systems, once a star of American technology, appears to be hoping to regain its industry laurels. The company announced first-quarter financial results and announced strong growth forecasts for the year, driven by the introduction of artificial intelligence (AI). According to estimates, the company’s stock price hit a record high at a price not seen in 2000 due to the stock market bubble. dot comthanks to its position as a powerhouse of Internet infrastructure, Cisco became for some time the world’s largest company by capital.
As a result, Cisco Systems shares, which rose 3.14% on Wednesday, soared more than 8% in the after-hours market and hit more than $80 on an intraday basis, the highest level since March 2000. March 27, 2000, just before the bubble burst. dot comover $82. Year-to-date through yesterday’s trading, the security has accumulated a 30% rerating, but since the yearly low recorded in early April, the cumulative increase has exceeded 45%, and while the market cap approaches $305 billion, it is still a long way from current leaders Nvidia, Microsoft, and Apple.
The telecommunications and internet network equipment giant has once again captured the attention of investors by improving its forecast for 2026 and showing progress in its efforts to capture a larger share of spending on new infrastructure related to AI.
The company expects sales of up to $61 billion (more than 52.4 billion euros) for the fiscal year ending in July, $1 billion more than previously expected and ahead of Wall Street expectations. Cisco also raised its profit forecast, which also exceeded analyst expectations. The company expects earnings per share, excluding various special items, of $4.14 this year, compared to the market’s average estimate of $4.05.
For the second quarter, Cisco expects revenue to be between $15 billion and $15.2 billion and earnings per share of $1.02, both of which will beat the market.
Revenue for the first quarter ended October rose 8% to $14.9 billion, beating market expectations. Orders for infrastructure equipment from major service providers cloudexceeded 1.3 billion.
These predictions create new optimism about Cisco’s potential to benefit from increased investment in AI. The company, which competes with groups such as Broadcom and HPE, has updated its chips and network equipment to improve interconnections. rack Server and data center integration for managing complex AI tasks. In this sense, Cisco has established various alliances with Nvidia, the world leader in this field, to strengthen its position in this field.
In early 2024, as part of its strategic push into AI, Cisco Systems completed its $28 billion acquisition of Splunk, a company focused on cybersecurity. At the same time, the company embarked on a severe restructuring program, cutting more than 4,000 jobs, or about 5% of its workforce. Subsequently, due to deteriorating business performance, the number of job cuts was further expanded to 6,300.
During this time, Cisco has been backed by investment banks such as KeyBanc, Piper Sandler, and UBS, who have raised their price targets for the company in the past few hours. The latter upgraded its recommendation from Neutral to Buy and set a price target of 88 euros, on the back of new orders from hyperscalers and strong demand in the corporate sector.
About The Author
