For more than four decades, Cisco has operated beneath the digital world most people see.
Every video call, cloud application, enterprise system and connected device depends on networks capable of moving information reliably from one place to another. Cisco became one of the companies that made that connectivity possible, evolving from a small Stanford-connected startup into a global technology company spanning networking, cybersecurity, observability, collaboration and silicon.
Now the company is facing another technological transition.
Artificial intelligence is creating a new kind of computing environment—one where enormous numbers of machines, models and autonomous software agents constantly exchange information. Cisco believes that shift will make the network more important, not less. In fiscal 2026, the company generated US$63.3 billion in revenue, up 12%, while AI infrastructure orders from hyperscalers reached US$9.3 billion.
That puts Cisco in an unusual position: the company that helped connect the early internet is now trying to become one of the companies connecting the AI economy.
Financial Highlights (FY2026)
Cisco’s latest financial results show a company accelerating rather than simply defending its legacy networking business.
- Revenue (FY2026): US$63.3 billion (+12%)
- GAAP Net Income: US$13.3 billion (+30%)
- GAAP EPS: US$3.33 (+31%)
- Non-GAAP Net Income: US$17.2 billion (+13%)
- Non-GAAP EPS: US$4.33 (+14%)
- Operating Cash Flow: US$14.2 billion
- AI Infrastructure Orders: US$9.3 billion
- RPO: US$46.7 billion
- Employees: ~86,200
- Founded: 1984
The fourth quarter was particularly strong. Revenue reached US$17.3 billion, up 18%, while GAAP net income increased 51% to US$3.9 billion. Networking product revenue rose 28%, security revenue increased 14%, and collaboration revenue grew 12%.
The numbers reveal something important.
Cisco’s growth is no longer coming from a single technology cycle. Networking, security, observability and AI infrastructure are increasingly becoming parts of the same platform.
Cisco Began With A Problem That Looked Almost Ordinary
Cisco’s origin story started at Stanford University in 1984.
Len Bosack and Sandy Lerner worked in different buildings and wanted their computers to communicate. The problem was that the networks were using incompatible protocols.
Their solution was not simply another computer.
It was a router capable of allowing different networks to communicate.
Cisco was founded in December 1984, and its first major product, the Advanced Gateway Server, shipped in 1986. The company’s early technology helped create a way for different networks to communicate reliably—a capability that became increasingly important as the internet expanded.
The insight behind Cisco was deceptively simple:
The value of a computer increases when it can communicate with other computers.
That principle would eventually become one of the foundations of the internet economy.
The Router Became The Beginning Of Something Much Larger
Cisco initially built its business around routers.
But the company quickly expanded into switching, wireless networking, security, collaboration and other technologies needed to operate increasingly complex digital environments.
The expansion was partly organic and partly driven by acquisitions.
Over four decades, Cisco has completed more than 240 acquisitions and investments, building a portfolio that now extends far beyond traditional routing hardware. Its acquisition of Splunk in 2024 was particularly significant because it strengthened Cisco’s position in observability and security while adding a massive layer of data and software capabilities to its platform.
The strategy reflects a broader change in networking.
A modern network is no longer just a collection of physical devices.
It is a software-controlled system that needs to understand applications, users, security threats, workloads and data.
Cisco has been repositioning itself around that reality for years.
The Network Is Becoming More Important In The AI Era
Artificial intelligence changes the economics of computing.
Traditional applications often involve relatively predictable communication between users, servers and databases.
AI workloads can be dramatically more demanding.
Training and inference require enormous volumes of data to move between processors, storage systems and other machines. AI agents can generate even more traffic as they interact with applications and other agents.
Cisco says AI-driven network traffic could triple over the next three years, increasing the pressure on the infrastructure connecting data centers and AI systems.
This creates an opportunity for Cisco.
The AI industry is often associated with GPUs, models and cloud platforms.
But none of those systems operate in isolation.
They need a network.
And the faster AI systems become, the more important that network becomes.
Silicon One Is Cisco’s Bet On The Hardware Layer
Cisco’s strategy increasingly reaches down into the silicon itself.
The company introduced Silicon One in 2019 after a reported US$1 billion investment in a unified networking architecture designed to scale across different types of networking systems.
The idea is strategically important.
Instead of relying entirely on external chip suppliers, Cisco can design specialized silicon optimized for the networking workloads it expects to see.
In 2026, Cisco introduced its Silicon One G300, designed for large-scale AI clusters. Cisco says the architecture can improve network utilization by 33% and reduce job-completion time by 28% compared with non-optimized traffic in its stated testing.
That puts Cisco in competition not only at the networking-system level, but increasingly at the silicon and architecture level.
AI Infrastructure Has Become A Major Business
The clearest evidence of Cisco’s transformation is the growth of its AI infrastructure business.
During fiscal 2026, hyperscalers placed US$9.3 billion of AI infrastructure orders with Cisco, including US$4 billion in the fourth quarter alone.
Cisco generated approximately US$4 billion of AI infrastructure revenue during FY2026 and expects approximately US$7.5 billion in FY2027.
Those numbers are significant because they show that AI is moving from an experimental product category into a material contributor to Cisco’s business.
The company’s future therefore depends increasingly on a question that would have been difficult to imagine a decade ago:
Can Cisco become an essential infrastructure supplier to the AI data center?
The latest numbers suggest it is making meaningful progress.
Security Became Part Of The Same Infrastructure
AI does not only increase network traffic.
It increases the attack surface.
AI agents can access applications, data and enterprise systems, creating new security challenges around identity, permissions, model behavior and autonomous software.
Cisco has therefore been combining networking with security and observability.
The acquisition of Splunk strengthened this strategy by adding security information, observability and data analytics to Cisco’s portfolio.
Cisco has also introduced AI Defense, designed to identify AI assets within enterprise environments and protect AI applications against emerging threats.
This creates a broader strategic proposition:
Cisco does not want to sell the network separately from security. It wants to operate the infrastructure that connects, observes and protects AI systems.
Cisco Cloud Control Is Another Piece Of The Strategy
As enterprise infrastructure becomes more complex, managing thousands of individual systems becomes increasingly difficult.
Cisco’s answer is moving toward unified management.
Cisco Cloud Control brings networking, security and other infrastructure capabilities into a common platform. At Cisco Live 2026, the company demonstrated how AI agents could perform cross-domain troubleshooting and automate infrastructure operations.
The significance goes beyond another software product.
If AI can eventually understand the state of an organization’s infrastructure and take action automatically, the network itself becomes an intelligent operating environment.
That is the direction Cisco is pursuing with AgenticOps.
The Company Is Changing What A Network Company Means
For decades, Cisco was primarily understood as a networking hardware company.
That description is becoming increasingly incomplete.
Cisco’s current portfolio spans:
→ Networking
→ Cybersecurity
→ Observability
→ Collaboration
→ Data center infrastructure
→ Silicon
→ AI infrastructure
→ Cloud management
The company says it has already achieved more than 50% of revenue from software and services, reflecting a transformation that began well before the current AI boom.
This diversification matters because hardware cycles can be volatile.
Software, subscriptions and recurring services can create a more predictable economic model while also increasing the value of Cisco’s installed base.
Why Splunk Changed The Strategic Equation
Cisco’s acquisition of Splunk was one of the company’s most consequential moves in recent years.
The deal brought together networking telemetry with security and observability data.
That matters because modern IT problems rarely exist inside one system.
A network slowdown can originate from an application.
A security event can affect infrastructure.
An application problem can originate from cloud resources.
Observability provides the visibility needed to understand those relationships.
By combining Splunk with its networking and security portfolio, Cisco is attempting to create a platform capable of seeing more of the digital environment than any individual product could.
That is strategically different from simply selling switches and routers.
Cisco’s Next Chapter Is Being Built Around Infrastructure
Cisco’s current strategy is built around several converging technologies.
AI-ready data centers
The company is developing networking systems, silicon, optics and management platforms designed specifically for AI workloads.
Cybersecurity
Cisco is integrating security more deeply into networking, identity and AI infrastructure.
Observability
Splunk provides visibility across applications, infrastructure and security environments.
Agentic operations
Cisco is developing AI systems capable of helping IT teams diagnose and resolve infrastructure problems.
Digital resilience
The broader strategy is to keep critical infrastructure operating despite cyberattacks, outages and increasingly complex workloads.
Together, these businesses form a different kind of Cisco.
Not simply a networking company.
An infrastructure platform.
The Competitive Landscape
Cisco operates across several markets, which means its competitors vary by product.
In networking, it competes with companies such as Arista Networks, HPE, Juniper Networks and other specialized infrastructure providers.
In cybersecurity, it competes with companies including Palo Alto Networks, Fortinet, CrowdStrike and others.
In observability and security analytics, the competitive landscape includes Datadog, ServiceNow, Splunk’s former standalone competitors, and other enterprise software providers.
The most important competitive question, however, is not whether Cisco wins every individual category.
It is whether customers value the integration of networking, security, observability and AI management enough to prefer a unified platform.
That is the economic logic behind Cisco’s transformation.
Cisco’s Biggest Advantage May Be Its Installed Base
Cisco has spent more than four decades placing infrastructure inside organizations.
That creates an advantage that is difficult to reproduce quickly.
Customers have Cisco equipment embedded across data centers, campuses, branch offices, security environments and service-provider networks.
The company therefore does not have to introduce itself to the enterprise.
It already operates inside it.
The strategic opportunity is to expand the value of that installed base.
A customer that already uses Cisco networking may have reasons to add Cisco security.
A security customer may adopt observability.
An observability customer may use AI-powered management.
And an enterprise preparing an AI data center may already have Cisco infrastructure in place.
The network becomes the entry point to a much broader technology platform.
What Investors Should Watch
Cisco’s next phase will depend on several factors.
AI infrastructure demand
The company expects AI infrastructure revenue of approximately US$7.5 billion in FY2027, making hyperscaler spending one of the most important growth variables.
Hardware margins
AI networking products can produce enormous revenue opportunities, but Cisco’s latest results also show the challenge: GAAP gross margin fell to 64.1% in Q4 FY2026 from 63.2% a year earlier, while non-GAAP gross margin declined to 66.3% from 68.4%.
Software integration
The long-term value of Splunk and Cisco’s broader platform strategy depends on how effectively the company integrates data, security, observability and networking.
Agentic AI
If autonomous software agents become widespread, network traffic and infrastructure complexity could rise dramatically. Cisco is betting that this will increase demand for intelligent networking and security rather than make those systems less important.
Capital allocation
Cisco continues returning capital to shareholders while investing heavily in infrastructure and acquisitions. In Q4 FY2026 alone, it returned approximately US$3.2 billion through dividends and share repurchases.
Cisco’s Future Depends On A Very Old Idea
Cisco began with a simple problem: two computers could not communicate because they belonged to different networks.
The solution was to build a bridge between them.
More than forty years later, the technical details have changed beyond recognition.
But the underlying problem has not.
Technology creates more powerful machines, applications and systems. Their value depends on whether they can communicate with one another.
The AI era is producing the most powerful computing systems humanity has built—and simultaneously creating an enormous new demand for the infrastructure connecting them.
Cisco is betting that this makes the network more important than ever.
Its fiscal 2026 results offer the strongest evidence yet that the bet is beginning to pay off: US$63.3 billion in annual revenue, US$9.3 billion in AI infrastructure orders and a new fiscal 2027 revenue target of US$72.2 billion to US$73.4 billion.
The company that once connected incompatible networks is now trying to connect the machines, agents and intelligence systems of the next technological era.
And that may be Cisco’s most important transformation yet.
Market Snapshot
Company: Cisco Systems, Inc.
Founded: 1984
Headquarters: San Jose, California, United States
CEO: Chuck Robbins
Industry: Networking, Cybersecurity, Observability & AI Infrastructure
Employees: ~86,200
Revenue (FY2026): US$63.3 billion
Net Income (FY2026): US$13.3 billion
AI Infrastructure Orders (FY2026): US$9.3 billion
Market Cap: approximately US$430–460 billion, depending on the market date.
Official Website: Cisco
