By - Cisco reported record Q3 fiscal 2026 revenue of $15.84 billion, up 12% year-over-year, beating Wall Street’s estimate of $15.56 billion.
- Cisco AI orders from hyperscalers totaled $5.3 billion year-to-date, with the company raising its full-year AI order target to $9 billion, up from $5 billion.
- Shares surged 17% in extended trading on May 13, adding to the 32% gain Cisco stock had already delivered in 2026 before earnings.
- CEO Chuck Robbins announced roughly 4,000 job cuts (less than 5% of the workforce) beginning May 14, with $1 billion in total restructuring charges.
Cisco AI orders are rewriting the company’s story: the networking giant reported record quarterly revenue Wednesday and paired it with a major workforce reduction, sending its shares up 17% after hours in one of the most dramatic single-day moves in its recent history.
The results, released May 13, showed a company that has pivoted hard into AI infrastructure and is now harvesting the rewards — while simultaneously cutting the parts of the business that didn’t make it into the new plan. It’s a familiar tech playbook in 2026, but Cisco’s version of it is playing out faster and more profitably than most expected.
Record Revenue, Raised Guidance, and a Bold AI Bet
Cisco posted adjusted earnings of $1.06 per share against the $1.04 consensus, with revenue of $15.84 billion versus $15.56 billion expected. Net income came in at $3.37 billion, up substantially from $2.49 billion in the year-ago quarter.
The real headline was artificial intelligence infrastructure. Cisco received $1.9 billion in Cisco AI orders from hyperscalers in Q3 alone, up from just $600 million in the same quarter a year earlier. That growth pushed year-to-date totals to $5.3 billion and prompted management to lift the full-year AI order target to $9 billion, from a previous $5 billion, according to the official investor release. Full-year AI revenue guidance also climbed to $4 billion, up from $3 billion.
📊 $9 billion: Cisco’s raised full-year AI infrastructure order target for FY2026
That’s an 80% increase from the $5 billion figure Cisco guided to just one quarter ago. Q3 Cisco AI orders alone grew 3x year-over-year, from $600M to $1.9B, driven by Silicon One network processors and Acacia Optics deployments.
4,000 Jobs Gone Starting Today
CEO Chuck Robbins announced the latest round of job cuts in a blog post published alongside the earnings release. The cuts affect fewer than 4,000 employees — less than 5% of Cisco’s global workforce — with layoffs beginning on May 14, the day after the announcement.
Robbins was precise about the strategic rationale: “The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest.” The company expects $1 billion in pre-tax restructuring charges, with roughly $450 million recognized in the fiscal fourth quarter.
📊 103,571 tech jobs cut in 2026 so far
According to Layoffs.fi, the broader tech sector has shed over 100,000 jobs this year, approaching the 124,201 total recorded for all of 2025. Cisco’s 4,000 cuts add to that total, with the layoffs framed explicitly as an AI-driven reallocation of capital.
Networking Is the Real Growth Driver
Cisco’s networking segment led the quarter, with revenue up 25% to $8.82 billion, well ahead of Wall Street’s $8.47 billion forecast. Security revenue was flat at just under $2 billion, pointing to the uneven nature of the AI-driven recovery within the company.
Holger Mueller of Constellation Research summarized the shift bluntly: “Cisco is no longer the sick man of the Bay Area.” His full analysis noted that companies running AI need to invest heavily in networks — and Cisco is the primary beneficiary of that demand. The networking segment’s 25% growth makes up for the flat performance in observability, collaboration, and security, which Mueller described as “erstwhile bets on other growth areas” that have failed to gain traction.
Two Key Acquisitions Expand the AI Footprint
During Q3, Cisco completed two acquisitions aimed at its growing “agentic” security strategy. Astrix Security, an Israeli cybersecurity firm, was acquired for close to $300 million, and Galileo Technologies, an AI-native observability startup, was also closed. Both acquisitions are designed to enhance Cisco’s ability to detect and govern AI agent activity across enterprise networks.
These moves mirror the broader AI infrastructure buildout that TechToken has been tracking across the hyperscaler landscape, where compute, networking, and security are increasingly bundled into integrated AI infrastructure contracts rather than purchased as separate line items.
TechToken Take
Cisco’s story is one of the more compelling redemption arcs in enterprise tech. A company that missed the cloud wave is now the picks-and-shovels play for AI data centers. Raising AI order guidance 80% in a single quarter is extraordinary — but so is the uncomfortable truth that every job cut is a direct consequence of AI shifting budget from human labor to network infrastructure. The networking segment growing 25% is the clearest proof that AI demand is physical, not just software: you still need cables, switches, and routers at hyperscale, and Cisco makes the best ones.
What to Watch Next
For Q4, Cisco guided for $16.7-16.9 billion in revenue and $1.16-1.18 in adjusted EPS, both well above prior Wall Street expectations, suggesting that AI infrastructure spending from hyperscaler customers has no near-term ceiling.
Analysts at Constellation Research estimate that Cisco could recognize at least $6 billion in AI revenue in FY2027, making it one of the most direct infrastructure beneficiaries of the current AI capital expenditure cycle. The stock’s 32% gain year-to-date before earnings suggests the market is already pricing in continued outperformance — the question now is how long the AI order acceleration continues.
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