Cisco's AI Supercycle Lifts Stock 33% as Hyperscaler Orders Double

Cisco shares jumped 13% to a fresh record on May 14, the stock's best single session since 2011, after the networking giant raised its fiscal-year AI infrastructure and hyperscaler order forecast to $9 billion from $5 billion.cnbc Third-quarter revenue rose 12% to $15.84 billion and adjusted earnings hit $1.06 a share, both topping consensus, while CEO Chuck Robbins declared the industry had entered an AI-driven "networking supercycle."cnbc +1 The company is also cutting fewer than 4,000 jobs — under 5% of staff — to redirect spending toward silicon, optics and security.cnbc

Hyperscaler orders accelerate past guidance

Cisco said it had already booked $5.3 billion of AI infrastructure and hyperscaler orders year-to-date, prompting the upward revision to $9 billion for the fiscal year.cnbc Networking revenue, the company's largest segment, climbed 25% to $8.82 billion, well above the $8.47 billion StreetAccount consensus.cnbc Management guided to $16.7–$16.9 billion in fourth-quarter revenue, comfortably above the $15.82 billion analysts had penciled in, and expects $4 billion of full-year revenue specifically tied to the AI/hyperscaler order book, up from $3 billion previously.cnbc

Robbins told CNBC the AI buildout is moving fast enough that Cisco is now selectively passing on hyperscaler projects, citing capital-allocation discipline rather than demand constraints.cnbc HSBC responded by upgrading the stock to Buy and lifting its price target 78% to $137, reframing Cisco from "value trap" to structural AI rerating story.thestreet

Dot-com peak in the rear-view, but bubble talk lingers

The rally extends a run that saw Cisco close above its March 2000 dot-com peak of $80.06 last December, ending a 25-year wait for shareholders.cnbc The stock is up 33% year-to-date, outpacing the Nasdaq's 14% gain, and traded as high as $119.36 intraday after the print.cnbc +1

That comeback has revived comparisons to the last networking boom. Cisco was the third-largest US company by market value at the end of 1999 before the bubble burst wiped out most of its capitalization.businessinsider Michael Burry has publicly likened Nvidia's current position to Cisco's pre-crash setup, and Morgan Stanley strategists have flagged a possible "Cisco moment" for AI hardware names within two years.barchart

Restructuring funds the next leg

The job cuts will trigger about $1 billion in pre-tax charges, with roughly $450 million landing in the fiscal fourth quarter.cnbc Robbins framed the restructuring as a reallocation toward AI silicon and merchant optics — the areas where hyperscaler design wins are concentrating — and said many displaced employees would shift into those roles internally.cnbc With networking growth reaccelerating and security still flat at about $2 billion, the bet is that custom silicon, not headcount, defines who wins the next phase of the AI infrastructure cycle.cnbc