Cisco System’s AI Infrastructure Orders Surge Past $2 Billion Target in Breakthrough Year

Cisco Systems Inc. is capitalizing on the AI infrastructure boom while maintaining operational excellence across its core segments.

Cisco Systems has emerged as the dominant infrastructure provider for the artificial intelligence revolution, with AI-related orders from hyperscale customers exceeding $2 billion in fiscal 2025. That’s more than double the original $1 billion target. This positions the company at the centre of one of technology’s most significant secular growth trends.

The stock offers compelling value for investors seeking exposure to AI infrastructure growth combined with steady dividend income generation and capital appreciation potential.

CISCO SYSTEMS INC. (Nasdaq symbol CSCO; www.cisco.com) lets investors tap a global producer of hardware and software that links and manages computer networks.

In the past few years, Cisco has expanded its software operations. Steady revenue from subscriptions cuts its reliance on hardware sales.

Under that plan, in March 2024, Cisco acquired Splunk Inc. (Nasdaq symbol SPLK) for $28 billion. The firm makes software that lets organizations analyze their data in real time. The purchase enhanced Cisco’s cybersecurity software business.

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Their combined expertise in AI is also helping clients better anticipate and prevent cyberattacks.

Cisco is gaining from growing AI demand

In its fiscal 2025 fourth quarter, ended July 26, 2025, Cisco’s revenue rose 7.6%, to $14.67 billion from $13.64 billion a year earlier. That beat the consensus forecast of $14.62 billion.

Sales of new equipment (74% of total revenue) rose 10.4%, while revenue from software and services (26%) improved 0.1%.

Overall earnings in the quarter, excluding unusual items, rose 11.9%, to $3.95 billion from $3.53 billion; due to fewer shares outstanding, per-share earnings gained 9.1%, to $0.99 from $0.87. That also topped the $0.98 consensus estimate.

The company continues to see strong demand for products related to artificial intelligence (AI). Orders related to AI totalled $2 billion in fiscal 2025, which was double the company’s $1 billion target.

Despite concerns that U.S. tariffs could increase Cisco’s costs, it now expects its earnings (excluding unusual items) in fiscal 2026 will rise about 6%, to between $4.00 and $4.06 a share. The stock trades 16.8 times the midpoint of that range. That’s an attractive multiple, as the company spends a high 16% of its revenue on research.

With the April 2025 payment, Cisco raised your quarterly dividend by 2.5%. Investors now receive $0.41 a share instead of $0.40. The new annual rate of $1.64 yields a solid 2.4%. The company also has $14.2 billion remaining under its current share buyback authorization. There are no time limits for those repurchases.

Including this latest increase, the company has raised its dividend by an average 2.6% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Above Average.

Recommendation in Dividend Advisor: Cisco Systems Inc. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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