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Cisco's Stock Jumps Nearly 7% on Strong AI-Driven Networking Demand

Networking

Business Honor
13 Febuary, 2025

Cisco raises revenue prediction, driven by AI demand for networking gear, boosting stock price and outlook.

Since the demand for artificial intelligence (AI)-driven cloud infrastructure is expected to rise; Cisco Systems raised their annual revenue forecast in expectation of higher demand for its networking equipment, including Ethernet switches and routers. As companies invest in AI technology, Cisco solutions are critical in data centers.

The trading saw a near 7% increase in Cisco's shares due to this positive prediction. Fiscal 2025 revenue will be between $56 billion and $56.5 billion, the company stated, an improvement over the previous estimate of $55.3 billion to $56.3 billion. This is consistent with companies increasing need for high-performance networking solutions to support AI activities. Additionally, Cisco expects its third-quarter sales to be slightly higher than analyst predictions, between $13.9 billion and $14.1 billion.

Cisco and the French AI company Mistral collaborated earlier this week to introduce an AI agent designed to improve processes and automate jobs. Cisco AI Defense, a tool designed to protect businesses from the misuse of AI tools, was announced by Cisco in January. These moves demonstrate how Cisco is evolving its networking experience to the changing needs of the artificial intelligence industry. Cisco also proved faith in the future of the company by giving permission to a $15 billion increase in its stock repurchase plan. There remains $17 billion available for stock buybacks.

Despite concerns about declining federal government spending in the US, Cisco's focus on helping businesses update their networks to support AI initiatives has helped maintain momentum. Slower government investment and politically motivated project delays are being offset by this increase in consumer demand. Cisco's exceptional performance in the networking sector, particularly in enabling AI-driven infrastructure, puts it in a strong position for future growth.