Cisco Systems on Wednesday night beat Street estimates on each the highest and backside line with its fiscal 2025 fourth quarter results. The firm additionally issued barely higher than anticipated steering, pushed by robust progress for its networking merchandise. Revenue in the quarter ended July 26 elevated 8% 12 months over 12 months to $14.67 billion, exceeding the LSEG-complied analyst consensus estimate of $14.62 billion. Non-GAAP earnings per share (EPS) elevated 14% on an annual foundation to 99 cents, beating expectations of 98 cents, LSEG knowledge confirmed. GAAP stands for typically accepted accounting rules. CSCO 1Y mountain Cisco Systems 1 12 months Cisco inventory, which can be one of many 30 names that make up the Dow Jones Industrial Average , dipped barely in what was a uneven after-hours buying and selling session. Shares closed at a 52-week excessive of $71.79 every final Friday and traded a few {dollars} beneath that degree Wednesday night time. Bottom line Overall, it was a fairly stable quarter for Cisco. The laptop networking tools and safety firm reported one other quarter of big order progress because of synthetic intelligence infrastructure spending and an enterprise networking refresh cycle. When we overview Cisco, we at all times give attention to orders as a result of that is the most effective main indicator of the place income is headed. It’s at all times been an order story, and we preferred what we noticed in the fiscal fourth quarter. However, it wasn’t all clear. Sure, the safety phase had constructive order progress as nicely, however it reported a giant income miss that can increase some flags. Still, what issues to us is that Cisco has was a misunderstood AI play. The firm is taking in billions of {dollars} of orders from webscale, often known as hyperscaler, clients, and huge alternatives are forward from huge firms and sovereign AI — nations increasing their capabilities and infrastructure. Hyperscalers are the family huge tech names like Amazon , Meta Platforms , and Microsoft . In a market that rewards AI-exposed corporations with lofty valuations, Cisco trades at a really cheap excessive teenagers price-to-earnings a number of. That valuation is just too low cost to us. Why we personal it Cisco Systems is an enterprise networking tools supplier that has made huge strides to attraction to webscale clients and carry in over $1 billion in AI infrastructure orders. The firm has additionally elevated its presence in the safety market by its acquisition of Splunk. In addition, Cisco’s long-term transition towards subscription software program gross sales, that are sticky and include increased margins, ought to assist enhance the inventory’s undemanding price-to-earnings a number of. Competitors : Arista Networks , Hewlett Packard Enterprise , Juniper Networks Most latest purchase : July 28, 2025 Initiated : July 17, 2025 Some analysts imagine Cisco will not get full credit score for its AI enterprise till the corporate breaks out when these orders will flip into income. During the earnings name, administration defined it acknowledged roughly $1 billion of AI income from webscale clients throughout fiscal 12 months 2025. We’ll see if that added info helps the inventory earn more credit score in the weeks forward. We are reiterating our buy-equivalent 1 ranking and conserving our $78 worth goal for now. We initiated Cisco on July 17 and made two subsequent buys over the subsequent two weeks. Commentary Total Product orders elevated 7% in fiscal This autumn 12 months over 12 months with progress throughout all geographies, with phase income up 10% to $10.89 billion. Starting off with Networking , product orders elevated by a double-digit price, representing the fourth consecutive quarter of such progress. An enormous cause behind this order surge is Cisco’s quick rising AI infrastructure enterprise and its potential to seize share from webscale clients. The momentum in this enterprise continued in the fiscal fourth quarter with orders exceeding $800 million, bringing the fiscal 12 months 2025 complete to over $2 billion. That’s double administration’s unique goal for the 12 months. During the earnings name, CEO Chuck Robbins identified that orders from 4 out of the highest six webscale clients, every grew orders in the triple digits. Even higher, two of these clients every positioned complete orders of over $1 billion throughout Cisco’s 4 enterprise segments in the fiscal 12 months. One cause why Cisco has made enormous strides in its AI efforts is because of a serious partnership with Nvidia . The two corporations have teamed as much as combine Cisco’s Nexus switches with Nvidia’s Spectrum-X structure to supply what the corporate describes as low latency, excessive pace networking for AI clusters. Cisco has additionally built-in a safety answer for AI factories. Beyond Nvidia, Robbins stated Cisco has an in depth relationship Advanced Micro Devices and is working with AMD on some sovereign AI offers, together with the one with Humain, a newly launched Saudi Arabian AI firm. Cisco can be receiving orders from neocloud suppliers. CoreWeave , which rents out Nvidia chips to clients for AI workloads, is an instance of a neocloud. Robbins stated there have been a number of massive offers in the quarter from these neoclouds that weren’t talked about in the disclosed webscale AI infrastructure order determine. In addition to the webscale networking order progress story, there is a robust refresh cycle taking place from enterprise clients adopting the corporate’s Catalyst 9000 switches in addition to routers, wi-fi entry factors, and industrial internet-of-things, or IoT, units. While it’s nonetheless early, Robbins identified that enterprise AI orders are beginning to ramp up and the corporate is rising a buyer pipeline “in the hundreds of millions.” By division, Networking income elevated 12% to $7.63 billion, by far Cisco’s largest, and administration known as out progress throughout most of its portfolio. They noticed double-digit progress in web infrastructure and enterprise routing and good progress in switching. Server income, nevertheless, declined. The Security division, product orders elevated by mid-single digits. Still, we had been disenchanted by the numerous income miss, even with 9% year-over-year enhance. Cisco boosted its options in this business final 12 months when it paid $28 billion to amass Splunk, so we might have most well-liked to see more energy. However, Robbins may be very upbeat in regards to the future. He defined on the earnings name how orders for the newer, refreshed merchandise inside Security elevated by above 20%. The weak point largely got here from its U.S. federal authorities enterprise, which has been damage by price range cuts. When backing out the federal enterprise, the remainder of world safety order progress elevated by double digits in the fourth quarter. Cisco has about two-thirds of its safety portfolio rising above 20%, which provides administration confidence in its potential to hit its long-term goal of 15% to 17% progress from its Security and Observability enterprise. Observabilit y and Collaboration grew barely in fiscal This autumn however missed estimates. Services income was flat at $3.79 billion, which missed estimates. Lastly, we at all times admire Cisco’s constant method to returning money to shareholders. The firm purchased again $1.3 billion price of inventory in the quarter at a mean worth of $64.65. It has $14.2 billion remaining beneath its authorization. Guidance Cisco expects fiscal 2026 first quarter income of $14.65 billion to $14.85 billion. The midpoint of $14.75 billion is a beat in opposition to the consensus of $14.62 billion. It additionally sees non-GAAP EPS of 97 to 99 cents. The midpoint of 98 cents is a penny increased than the consensus. For the full-year 2026, Cisco expects income of $59 billion to $60 billion. The midpoint of $59.5 billion is a slight beat in opposition to the consensus of $59.4 billion. It sees non-GAAP EPS of $4 to $4.06. The midpoint of $4.03 is a penny increased than estimates. (Jim Cramer’s Charitable Trust is lengthy CSCO, AMZN, META, MSFT. See right here for a full checklist of the shares.) 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