The AI boom no longer revolves around chips alone. AI stocks like Cisco show how quickly Wall Street has shifted toward the infrastructure behind AI systems. In fiscal 2025, Cisco’s AI infrastructure orders topped $2 billion, more than double the company’s original target.
By May 2026, Cisco said AI infrastructure orders had already reached $5.3 billion year to date. The company now expects $9 billion in AI infrastructure orders for the full year.
Now, investors suddenly see Cisco as one of the best AI stocks outside Nvidia.
Key Takeaways
- Cisco’s AI infrastructure business grew much faster than Wall Street expected.
- AI data centers now need faster networking systems as much as they need GPUs.
- Investors now focus on second-wave AI winners like networking, optics, and power infrastructure companies.
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Cisco Found The Next Big AI Opportunity
Cisco now sells one of the most important parts of modern AI infrastructure. Massive AI systems need thousands of GPUs to work together at the same time. These chips constantly exchange huge amounts of data during AI training and inference tasks.
Without fast networking, many of those expensive chips sit idle. This problem created a huge opening for Cisco.
In Q3 FY2025, Cisco earnings passed its $1 billion AI infrastructure target one quarter earlier than expected.
By Q4 FY2025, the company had already pushed AI infrastructure orders above $2 billion.
Cisco also reported strong growth in data-center networking demand. The company said data-center switching orders rose more than 40%, while networking product orders increased more than 50% in Q3 FY2026.
This shows that hyperscalers now spend heavily on networking capacity, not only on GPUs.
AI Data Centers Need More Than Nvidia Chips
AI systems need an entire infrastructure stack to operate efficiently. Companies must build networking systems, cooling systems, power infrastructure, optical links, and storage platforms around GPUs.
Networking now plays a critical role because AI workloads create enormous amounts of east-west traffic inside data centers.
GPUs constantly exchange information during model training. Slow connections reduce efficiency and increase costs.
Cisco wants to solve that problem.
The company recently introduced its Silicon One G300 switch platform, which supports speeds up to 102.4 Tbps. Cisco says the system can improve AI job completion time by 28%.
This is an important improvement because hyperscalers spend billions of dollars building AI clusters.
Faster networking allows those companies to use expensive GPU systems more efficiently.
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Wall Street Is Expanding The AI Trade
Investors now understand that AI spending will spread across the entire data-center ecosystem.
Because of this, Cisco’s stock outlook changed so quickly. The company combines strong enterprise relationships, recurring infrastructure demand, and growing exposure to AI spending.
Cisco now gives investors another way to benefit from AI growth without relying only on Nvidia.
In Q3 FY2026, Cisco reported $15.8 billion in revenue, up 12% year over year.
The company also expects at least $6 billion in AI hyperscale revenue in fiscal 2027.
Wall Street now sees a simple reality. Every large AI cluster needs networking infrastructure, regardless of which company sells the GPUs.
Conclusion
Cisco’s rise shows that the AI market has entered a new phase. Chips still dominate the industry, but networking infrastructure now sits just as close to the center of AI growth. This gives Cisco a much larger role in the AI economy than most investors expected only a year ago.
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