Cisco Projects $7.5 Billion AI Revenue for Fiscal 2027 as Operating Margin Hits 35%
Updated
Updated · Trefis · Aug 24
Cisco Projects $7.5 Billion AI Revenue for Fiscal 2027 as Operating Margin Hits 35%
3 articles · Updated · Trefis · Aug 24
Summary
Cisco guided fiscal 2027 revenue above Wall Street expectations and said non-GAAP operating margin should reach about 35%, topping the prior year's 34.8% as a company high watermark.
AI infrastructure is driving that outlook: hyperscaler-related revenue is projected at $7.5 billion in fiscal 2027, up from about 6% of fiscal 2026 revenue and less than 2% in fiscal 2025.
That mix shift carries a slight gross-margin headwind because it leans on high-volume hardware, Silicon One systems and optics, but Cisco says the growth requires minimal additional spending.
At roughly $111 a share, Cisco trades near 21.5 times expected fiscal 2027 earnings and 20 times fiscal 2028 estimates, leaving limited upside unless investors keep paying a premium multiple.
Cisco returned $12.7 billion through buybacks and dividends in fiscal 2026—about 99% of free cash flow—while management framed the AI buildout as the early stage of a networking super cycle.