Dear Cisco Stock Fans, Earnings Are Just Around the Corner

A particular kind of pressure comes from performing well. Cisco Systems (CSCO) built it for itself. After a fiscal third quarter that blew past its own guidance, the company is now walking into its fiscal fourth-quarter 2026 report, due in the coming weeks, with expectations it essentially wrote.

Artificial intelligence (AI) infrastructure spending is pouring into Cisco's order book, enterprises are in the thick of a campus networking refresh cycle, and routing demand hasn't cooled off. Then there's Cisco's growing push into AI-powered security and observability. It's a signal that the company is expanding its stake in the infrastructure that makes AI work. Further, both revenue and EPS posted double-digit growth, and the company beat estimates on both lines. 

Now, with Q4 guidance pointing to another quarter of double-digit growth, investors will be watching closely to see whether Cisco can maintain that streak and justify the growing optimism surrounding its AI-led transformation.

About Cisco Stock

Headquartered in San Jose, California, Cisco develops networking, cybersecurity, collaboration, cloud, data center, wireless, Webex, analytics, and managed service technologies. With a market cap of $456.7 billion, it provides networking infrastructure, security, observability, communication, technical support, consulting, and managed services.

Cisco's shares have rewarded shareholders handsomely during the past year. Shares have climbed 76.9% over the last 52 weeks, including an impressive 49.3% gain in just the past six months. 

From a valuation standpoint, CSCO stock is trading at 27.09 times forward adjusted price-to-earnings and 7.26 times forward sales. Both multiples sit above the industry averages as well as the company's own five-year averages, suggesting investors continue to assign the stock a premium valuation.

Meanwhile, dividend investors have quieter reasons to like the stock. The company has increased its dividend for 14 consecutive years and currently pays an annual dividend of $1.68 per share, translating to a 1.45% yield. Its latest quarterly dividend of $0.42 per share was distributed on July 22 to shareholders of record as of July 6.

Cisco Surpasses Q3 Earnings

Cisco reported its fiscal third-quarter 2026 results on May 13, triggering a positive market reaction. The stock gained 2.6% on the day of the announcement before rallying another 13.4% in the following trading session.

Revenue climbed 12% year-over-year (YOY) to $15.8 billion, comfortably ahead of analysts' expectations of $15.55 billion. Non-GAAP EPS increased 10.4% from the prior-year period to $1.06, beating the Street’s estimate of $1.04.

Growth remained broad-based across the business. Product revenue rose 17%, supported once again by robust demand for AI infrastructure and campus networking solutions. Meanwhile, services revenue came in at $3.7 billion, down 1% YOY, primarily because of the timing of service contract renewals.

Strong customer demand was evident across Cisco's order book. Total product orders increased 35% YOY during the quarter. Excluding hyperscaler customers, whose orders expanded at a triple-digit rate, product orders still advanced 19%, highlighting healthy demand across enterprise markets.

Networking continued to lead the way. Networking product orders jumped more than 50%, campus networking orders grew more than 25%, and data center switching orders increased by over 40% YOY. These results underscore broad-based strength across Cisco's core networking portfolio.

Demand from hyperscale customers also continued to accelerate. AI infrastructure orders reached $5.3 billion year-to-date (YTD), prompting Cisco to raise its fiscal 2026 AI infrastructure order outlook to $9 billion. Also, the company lifted its projected AI infrastructure revenue target to $4 billion, up from $3 billion, reflecting confidence in sustained long-term demand and an expanding multi-year global campus networking refresh cycle.

Looking ahead, management expects Q4 revenue to range between $16.7 billion and $16.9 billion, with non-GAAP EPS projected between $1.16 and $1.18. For the full year FY2026, Cisco forecasts revenue of $62.8 billion to $63 billion, while non-GAAP EPS is expected to come in between $4.27 and $4.29.

On the other hand, analysts expect Q4 FY2026 EPS to increase 22.2% YOY to $0.99. Over the longer term, estimates call for full-year FY2026 EPS of $3.54, representing 15.3% YOY growth, followed by another 13.3% increase to $4.01 in fiscal 2027.

What Do Analysts Expect for Cisco Stock?

Wall Street maintains a cautiously optimistic stance on Cisco, assigning it an overall rating of “Moderate Buy.” Among 25 analysts covering the stock, 14 rate it a “Strong Buy,” one recommends “Moderate Buy,” and 10 advise investors to “Hold” the stock. 

The average price target of $130.27 implies potential upside of 7.2%. Meanwhile, the Street-High target of $150 points to a possible gain of 23.4% from current levels.