Cisco Systems (CSCO +13.23%) reported fiscal Q3 2026 earnings last night. Investors loved what they saw, and the stock is up by 17% at 10 a.m. ET.
NASDAQ: CSCO
Key Data Points
Cisco crushed expectations
This was a clean beat-and-raise report. Cisco's Q3 sales rose 12% year over year to $15.8 billion. Adjusted earnings increased 10% to $1.06 per diluted share. The Street consensus had pointed to earnings near $1.04 per share on sales of roughly $15.5 billion.
Looking ahead, Cisco's management also set full-year and next-quarter guidance targets well above the current analyst projections. Revenue guidance was approximately $1 billion above the consensus and the earnings targets raced 10% ahead of existing analyst targets.
Management cited heavy demand for AI data center infrastructure, far outweighing tariff uncertainty and flattish sales in the security segment. Product orders jumped 35% from the year-ago period, setting Cisco up with a strong order book to convert into revenues over the next couple of years.
And AI is fueling the fires. According to quotes from the earnings call, CEO Charles Robbins said hyperscaler orders rose by a triple-digit percentage.
Image source: Getty Images.
Old dog, new tricks, reasonable price
Cisco first broke through its dot-com-era stock price peak in February 2025, then did it again in February 2026. Today's 17% jump? That's not a recovery story anymore; it's just consistent momentum.
The networking world has changed beyond recognition since 2000, but Cisco stuck around and kept adapting. Now it's riding the AI infrastructure boom, with hyperscaler orders more than doubling since Q3 2025 and a $9 billion AI order book for the year.
Even so, Cisco's valuation remains reasonable. At a forward P/E of roughly 27x based on the new FY2026 guidance, Cisco trades at a significant discount to networking peers like Ciena (68x forward) and Nokia (32x forward).
This industry veteran looks like the reasonably priced option at a table full of expensive menus. If you want exposure to AI infrastructure without paying as if the boom had already happened, Cisco might deserve a closer look.
