Cisco CSCO reported stronger-than-expected earnings and revenue for its fiscal first quarter on Nov. 12, 2025, sending its shares up more than 7% in extended trading. The networking giant posted adjusted earnings of $1 per share (up about 10% year over year), beating the Zacks Consensus Estimate of $0.98 per share.
Revenues came in at $14.88 billion, surpassing the Zacks Consensus Estimate by 0.71%. Revenues rose 8% year over year, marking the fourth successive quarter of growth after a stretch of four back-to-back year-over-year declines (as mentioned on CNBC).
Networking Segment Leads the Way
Cisco’s core networking business was the standout performer, generating $7.77 billion in revenues, marking a 15% increase from a year earlier and ahead of analyst forecasts of $7.47 billion, according to StreetAccount, as cited in the above-mentioned CNBC article. The growth was aided by strong demand from hyperscale data centers and enterprises upgrading their infrastructure to support artificial intelligence workloads.
AI Demand: A Key Growth Driver
As artificial intelligence spending accelerates across industries, Cisco has been positioning itself as an AI player. Cisco said AI infrastructure orders from hyperscaler customers reached $1.3 billion, as reported by CNBC.
Upbeat Guidance
For the fiscal second quarter, Cisco expects revenue between $15 billion and $15.2 billion, above the Zacks Consensus Estimate of $14.65 billion estimate. Adjusted earnings are projected to range from $1.01 to $1.03 per share, compared with analyst expectations of 99 cents.
For the full fiscal year, Cisco anticipates revenue between $60.2 billion and $61 billion and earnings per share of $4.08 to $4.14 — both ahead of Zacks Consensus Estimates of $59.59 billion and $4.04 per share.
Weakness in Security and Collaboration Units
While networking delivered upbeat results, Cisco’s other major business segments underperformed. Sales in the company’s security unit dipped 2% to $1.98 billion, missing the average estimate of $2.16 billion, per StreetAccount, as cited in CNBC.
Collaboration revenues declined 3% to $1.06 billion, below the forecast of $1.09 billion, mentioned by CNBC. These declines point to the uneven performance across Cisco’s portfolio but the growing importance of AI opportunities.
What Lies Ahead?
The CSCO stock doesn’t have a good VGM (Value-Growth-Momentum) score. Its VGM score is D. However, the stock has risen 25.1% so far this year, beating the 16.9% gains delivered by SPDR S&P 500 ETF Trust SPY.
CSCO shares trade at a forward P/E multiple of 18.06X, lower than its 5-year high of 21.90X. The forward P/E multiple of CSCO is also lower than its underlying Computer – Networking industry’s forward P/E of 21.42X.
Cisco’s rich partner base is a key positive driver.Its strategy of infusing AI across current laggards – Security and Collaboration platforms and developing Agentic capabilities across the portfolio could prove to be a meaningful tailwind ahead.
Overall, the path ahead is mixed with possibilities and perils. It all depends on Cisco’s ability to capitalize on the AI arena and the continuation of investors’ interest in broader AI investments.
Against this backdrop, investors can explore Cisco-heavy ETFs like iShares U.S. Telecommunications ETF IYZ, First Trust NASDAQ Cybersecurity ETF CIBR and Amplify Cybersecurity ETF HACK. The basket approach helps lessen the company-specific concentration risks.
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Cisco Systems, Inc. (CSCO): Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports Amplify Cybersecurity ETF (HACK): ETF Research Reports First Trust NASDAQ Cybersecurity ETF (CIBR): ETF Research Reports iShares U.S. Telecommunications ETF (IYZ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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