Nov 12 (Reuters) - Cisco beat Wall Street estimates for first-quarter results and raised its annual revenue forecast on Thursday, as the network-gear maker benefits from strong demand from companies building out their AI infrastructure.
The company has doubled down on its AI efforts by making strategic investments as Big Tech's massive spending moves beyond AI processors to the switches and routers required to connect large data-center systems.
Cisco expects fiscal 2027 revenue in the range of $74.8
billion to $75.8 billion, compared with its previous forecast of $72.2 billion to $73.4 billion.
"We are in the very early stages of a multi-year networking supercycle," CEO Chuck Robbins said in a statement.
The company raised its fiscal 2027 forecast for AI infrastructure revenue from hyperscalers to $9 billion from $7.5 billion.
Meanwhile, Cisco is also building software tools that businesses can use to build their own armies of bots, known as AI agents, to protect their IT infrastructure against cybersecurity threats.
Cisco reported first-quarter revenue of $18.5 billion, compared with analysts' average estimate of $18.14 billion, according to data compiled by LSEG.
The company reported an adjusted profit of $1.40 per share for the quarter ended October 24, above estimates of $1.33.
Shares of the San Jose, California-based company were flat in volatile extended trading. They have risen about 32% so far this year through Thursday's close.
Cisco's gross margin has been a worry for investors, as a shortage of memory chips has pushed up component costs for hardware makers while suppliers prioritize chips for AI data-center customers.
The company reported first-quarter adjusted gross margin of 65.6%, slightly above analysts' estimate of 65.5% but down from 68.1% a year earlier.
(Reporting by Anzar Mehraj in Bengaluru; Editing by Sriraj Kalluvila)
