San Jose, May 12, 2026, 04:15 PDT
- Cisco finished Monday at $98.72, gaining 2.23%. The stock reached as high as $98.83 during the session, with traders adjusting positions before fiscal third-quarter earnings land after the bell on May 13.
- This isn’t about any single headline—it’s about a bigger question: can AI infrastructure orders and networking demand continue to beat back margin pressure?
- Polymarket’s thinly traded contracts currently give Cisco a 94% chance of topping $1.04 in non-GAAP EPS, or adjusted earnings per share. As for hyperscaler AI orders, traders are pricing in 69% odds that the figure comes in at $2 billion or more for fiscal Q3. Volumes remain low—these numbers hint at trader sentiment rather than reflecting a broad market read.
Cisco Systems popped back into pre-earnings momentum territory, closing out Monday at $98.72, up 2.23%. Shares briefly touched $98.83 during the session—marking the loftiest level in the recent data set. Investors are now awaiting fiscal third-quarter numbers, due after the bell Wednesday.
The logic is straightforward. Cisco’s being picked up by investors less for its reputation in legacy enterprise hardware, more for its exposure to AI networking—an angle that’s getting play ahead of actual results. Options traders, according to data from Investing.com, are bracing for a move of about 5.8% post-earnings, with contracts implying a swing of that magnitude in either direction.
The broader tape gave stocks a lift, but that wasn’t everything driving moves. U.S. equities ticked up Monday, AI fever pulling indexes higher—semiconductors surged 2.6%. Come early Tuesday, futures slipped as the AI boost faded and traders braced for fresh inflation numbers. Cisco’s price action reflected both crosscurrents: bullish bets on AI infrastructure met pushback from oil-fueled inflation and nagging rate anxiety.
Back in February, Cisco turned a few heads with its fiscal Q2 numbers. Revenue climbed 10% to $15.3 billion. Product orders notched an 18% gain; networking product orders picked up even more speed, jumping over 20%. AI infrastructure orders from the hyperscalers — the heavyweight cloud players — landed at $2.1 billion. CEO Chuck Robbins told investors Cisco was ready to provide the “trusted infrastructure” needed in the AI age. Cisco Investor Relations
The order book is coming into focus, not only the income statement. Cisco, in its prepared comments, projected AI orders topping $5 billion for fiscal 2026, and it’s looking at over $3 billion in AI infrastructure revenue from hyperscalers. Q2 saw $350 million in AI orders from neocloud, sovereign, and enterprise clients, and the pipeline sits above $2.5 billion.
That’s why a standard earnings beat might not cut it. Cisco’s already told investors to expect fiscal Q3 revenue somewhere between $15.4 billion and $15.6 billion, with non-GAAP EPS targeted at $1.02 to $1.04. There’s more: it projected non-GAAP gross margin—the slice of revenue left after covering product and service costs—at 65.5% to 66.5%. In Q2, gross margin slid 1.2 points year over year, with product mix and pricier memory both dragging.
The numbers under the AI narrative are anything but uniform. Networking posted a 21% jump in Q2, yet security slipped 4%. Cisco flagged that Splunk’s pivot to cloud subscriptions, moving away from its traditional on-premise contracts, is weighing on revenue—and that headwind looks set to linger through the back half of fiscal 2026. Investors are paying up for the faster-moving segments, but the laggards haven’t disappeared from the equation.
Peers aren’t moving in sync—far from it. Hewlett Packard Enterprise slipped 1.53% on Monday, while Cisco managed a gain. Arista Networks tumbled 3.77%, and that was with the broader market closing in the green. Fortinet climbed as well, but its gains couldn’t keep up with Palo Alto Networks or CrowdStrike, both catching more of the action in cybersecurity. It’s not a case of buying up every name in networking or security. Investors are zeroing in on AI exposure, margin discipline, and the kind of guidance companies are putting out.
Bulls argue Cisco’s aging gear is setting up for a fresh upgrade wave. Silicon One, optics, and campus refreshes—plus data-center switching—hint at more AI leverage than the company’s old-school router-and-switch reputation lets on. The story gets a data point from the Polymarket AI-orders contract, where traders are betting big: 97% odds on Cisco landing at least $1 billion in Q3 hyperscaler AI orders, 88% on $1.5 billion, and 69% on $2 billion or more.
Bears have something to worry about if all the upside is already reflected in the stock. JPMorgan’s latest $96 target actually sits below where shares ended Monday. Analyst consensus? Right around $90.29, according to tracking data. Of course, a stock trading above targets isn’t unheard of—but without tangible evidence, further gains get tough. For Cisco, that means investors want to see clearer strength in AI orders, minus any new margin shocks.
Sentiment in the AI infrastructure space is starting to feel a bit overextended. “The semis and AI infrastructure trade has taken on a life entirely of its own,” Ross Mayfield, investment strategy analyst at Baird, told Reuters. That dynamic goes a long way toward making sense of Cisco’s move, but it’s also a double-edged sword: as this kind of trade gathers steam, expectations for earnings ratchet up quickly. Reuters
Prediction markets have thrown a twist into the mix. Polymarket now shows a 97% probability the Federal Reserve stands pat in June. Reuters noted that, after the latest moves, traders aren’t betting on policy easing in 2026 anymore. For Cisco and the wider tech sector, lower rates just aren’t driving the story—earnings are taking center stage.
Cisco’s AI story isn’t up for debate this Wednesday—the market’s already made its call. What matters now: can the company keep orders, guidance, and gross margin steady, all at the same time? At $98.72, just being “solid” likely won’t satisfy. Investors will want proof, and not just in general terms.
