Cisco CEO Sees 'Multi-Billion-Dollar Networking Super Cycle' As Agentic AI Demand Surges

CEO Chuck Robbins sees a massive networking opportunity ahead, with Cisco projecting $9 billion in AI infrastructure revenue for fiscal 2027.

Cisco Systems kicked off its fiscal 2027 with a 24 percent revenue jump as surging demand for AI infrastructure fueled a 43 percent increase in networking revenue and what CEO Chuck Robbins calls a multi-billion-dollar networking "super cycle."

Cisco CEO Chuck Robbins told investors during the tech giant’s fiscal 2027 Q1 earnings call Thursday evening that demand for networking, security and observability is accelerating as customers build and secure infrastructure for the agentic AI era.

"The start to fiscal year [20]27 demonstrates the criticality of networking and security together as agentic AI accelerates as customers look to manage increasing traffic, costs, and threats," he said. Customers “are turning to Cisco for our networking expertise, security, and observability solutions and services."

The tech giant's networking product orders grew 28 percent during the quarter marking Cisco's ninth consecutive quarter of double-digit growth. Cisco, in fact, saw double-digit growth across every product family: service provider routing, compute, enterprise routing, wireless data center switching, and campus switching, Robbins said.

"These broad-based results support our view that we are in the early stages of a multi-year, multi-billion-dollar networking super cycle … and we are executing with focus and urgency to capture this incremental opportunity," Robbins said.

Cisco’s networking segment includes the core switching and routing businesses, as well as the company’s telecommunications, cloud, and optical networking products. Networking segment sales climbed a whopping 43 percent with revenue of $11.13 billion compared to fiscal 2026 Q1’s result, which the company said was driven by revenue from AI infrastructure and network refresh opportunities.

The company also raised its expectations for AI infrastructure revenue from hyperscalers to reach $9 billion in FY27, or 12 percent of the company's total revenue, more than double the company's fiscal 2026 levels, Robbins said.

Cisco Q1 2027 Financial Results

Cisco’s security segment sales increased 7 percent year over year with revenue of $2.12 billion, which was attributed to growth in network security, SASE, and Splunk, said Cisco CFO Mark Patterson.

Observability segment revenue climbed 2 percent year over year to $279 million.

Cisco’s collaboration segment sales posted 8 percent year-over-year growth to $1.14 billion compared to the first quarter of fiscal 2026, driven by sales growth in devices and cloud contact center, Patterson said.

The company’s product revenue, which is led by the networking business, increased 42.6 percent and service revenue decreased 7.1 percent during Q1 fiscal 2027.

Subscription revenue made up 44 percent of Cisco’s total revenue in the quarter. The figure is down slightly as subscriptions generally make up about half of Cisco's revenue. But Robbins, in an interview with CRN last month, attributed that dip to the "hardware explosion" that has taken place in recent years.

During the fiscal 2027 first quarter Cisco closed the acquisition of WideField Security Inc., a privately held security company.

For the fiscal 2027 first quarter ended October 24, Cisco reported that revenue was $18.5 billion, up 24 percent compared to the same period a year ago. Cisco posted non-GAAP earnings per share of $1.40, a 40 percent increase compared to a year ago and non-GAAP net income of $5.6 billion, up 39 percent year over year. The results marked Cisco’s strongest revenue and non-GAAP earnings per share growth rates in over 15 years, according to the company.

Cisco’s stock climbed 1.24 percent Wednesday to $102.01 in after-hours trading.