CSCO stock slips after Cisco raises FY2026 outlook on AI demand

Mo. Basuony

Published: February 11, 2026 5:29 PM ET

CSCO stock

Cisco’s CSCO stock moved lower in late trading Wednesday after the company posted fiscal second-quarter results that topped expectations and lifted its full-year forecast, even as investors weighed how much of the upside from the AI networking cycle is already priced in. As of 5:05 p.m. ET on Feb. 11, CSCO traded at $85.54, down $0.79 on the session, after swinging through a wide range.

CSCO stock reaction after earnings

The initial market response was cautious despite the beat-and-raise headline. One driver was the stock’s strong run into the print, which can leave less room for upside surprises. Another was the emphasis investors placed on forward demand signals—particularly the pace of AI-related orders and the durability of the broader campus and enterprise refresh cycle—rather than the just-reported quarter.

Volatility was notable: CSCO’s intraday range stretched from $78.25 to $87.54, reflecting how quickly sentiment can shift around AI infrastructure narratives and guidance details.

What Cisco reported for fiscal Q2

For the quarter ended Jan. 24, 2026, Cisco posted record revenue of $15.3 billion, up 10% year over year. GAAP earnings were $0.80 per share, while non-GAAP earnings were $1.04 per share. The company highlighted strength in product orders across geographies and customer segments, with networking orders accelerating.

Cisco also pointed to a meaningful ramp in AI infrastructure activity with hyperscalers, framing it as part of a broader “AI-ready” network buildout that spans switching, routing, wireless, and security.

Guidance rises, with tariffs noted

Cisco lifted its fiscal 2026 outlook, a key focus for CSCO stock holders. The company now expects full-year revenue of $61.2 billion to $61.7 billion and non-GAAP EPS of $4.13 to $4.17. For fiscal Q3, it guided to revenue of $15.4 billion to $15.6 billion and non-GAAP EPS of $1.02 to $1.04.

The guidance commentary also flagged that tariff impacts were incorporated based on current trade policy, a reminder that hardware-centric names can see margin sensitivity if costs shift faster than pricing or mix.

Product and security updates tied to “agentic” AI

Alongside results, Cisco has been rolling out product announcements aimed at securing and optimizing AI-era networks. Recent updates emphasized governance and runtime protections for AI workflows, plus network security enhancements intended to support encrypted, resilient connectivity as AI traffic grows.

For investors, the near-term question is whether these launches translate into measurable revenue acceleration and improved mix, or whether adoption takes longer as customers evaluate architectures and security requirements for AI agents in production.

What to watch next for CSCO

The next few months may hinge on three observable checkpoints:

Order momentum: Sustained double-digit product order growth would reinforce that AI infrastructure demand is broadening beyond a small set of buyers.
Margins and mix: Any shift toward higher-value platforms, software, and security attach rates could matter as the cycle matures.
Guidance cadence: If enterprise networking refresh demand stays firm, investors will look for continued confidence in quarterly guideposts, not just full-year ranges.

If AI-driven data-center and campus spending remains elevated through mid-2026, CSCO stock may find support even with choppy post-earnings trading. If spending normalizes faster than expected, the market may focus more on valuation and the pace of software and security growth.