Cisco stock rises ahead of Q4 earnings as investors focus on AI networking demand

Cisco Systems shares advanced on Wednesday as the networking equipment giant prepared to release its fourth-quarter earnings after the market close, with investors focused on whether the company can maintain its run of earnings beats and deliver strong forward guidance.

Wall Street expects Cisco to report adjusted earnings of $1.17 per share on revenue of approximately $16.82 billion. That would represent a new quarterly revenue record, surpassing the $15.84 billion reported in the fiscal third quarter.

For the fourth quarter, Cisco's management previously forecast revenue between $16.7 billion and $16.9 billion, which would mark another quarterly high. The company projected non-GAAP earnings of $1.16 to $1.18 per share, alongside a non-GAAP gross margin of 65.5% to 66.5% and an operating margin of 34% to 35%.

Cisco also raised its full-year guidance following its third-quarter results. The company now expects fiscal-year revenue of $62.8 billion to $63 billion and adjusted earnings of $4.27 to $4.29 per share. Its earlier forecast called for revenue of $61.2 billion to $61.7 billion and adjusted earnings of $4.13 to $4.17 per share.

At 1:43 p.m. EDT, Cisco shares were up 2.17%, or $2.61, at $123.07.

The stock is trading close to its record high of $130.37 after gaining nearly 60% so far this year, putting the company under heightened scrutiny ahead of the results.

Investor enthusiasm around artificial intelligence infrastructure spending and an accelerating networking equipment refresh cycle has helped make Cisco one of the stronger-performing stocks in the market.

With the shares already having posted a substantial year-to-date rally, investors are likely to pay close attention to Cisco's forward outlook and management commentary on AI-related networking demand. Strong guidance could provide another catalyst for the stock, while signs of slowing momentum could limit further gains.

Cisco's ability to demonstrate sustained growth in its next-generation infrastructure business will also be important in supporting its valuation.

The company delivered a strong fiscal third quarter, reporting record revenue of $15.8 billion, representing a 12% year-over-year increase. Non-GAAP earnings climbed 10% to $1.06 per share.

Both revenue and earnings came in above the upper end of Cisco's own guidance and exceeded Wall Street expectations by roughly 2%, respectively.

The company also reported strong demand across its product portfolio. Total product orders increased 35% year over year, while orders excluding hyperscale customers rose 19%. Networking product orders were particularly strong, accelerating by more than 50% year over year.

The upcoming results will therefore offer investors a fresh indication of whether Cisco's AI infrastructure opportunity and networking refresh cycle can continue driving growth and support the stock's recent rally.