Cisco hits $9B AI revenue, beats and raises, yet shares fall 6% anyway
pdamodaran · x · 2026-11-15
Cisco's fiscal Q1 2027: revenue of $18.5B, up 24% YoY and above the top of guidance; non-GAAP EPS of $1.40 beat both the guide ($1.34) and consensus ($1.32). AI revenue rose to $9B, and the FY2027 hyperscaler AI guidance was raised from $7.5B within a single quarter.
Full-year guidance moved up to $74.8-75.8B revenue and $5.47-5.53 EPS. But the mix is the story: gross margin of 65.6% only edged past the midpoint while product margin fell 350bps — AI hardware drives growth at lower margins than the software it displaces. Security grew 7%, with firewall orders up 30%+ again. Despite the beat-and-raise, shares dropped 6.24% to $95.64 the next day.
Related event: Cisco AI Revenue Tops $9B, Beats Estimates Yet Stock Falls(2 posts)→
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