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Networking segment surges 21 percent as hyperscalers and enterprises drive multibillion-dollar infrastructure modernization.
Cisco Systems is taking advantage of a big opportunity to expand its business during the first half of fiscal year 2026. There are several factors driving this expansion, including the acceleration of artificial intelligence network builds by hyperscale companies and other businesses, as well as the campus-wide network refreshes that are taking place throughout many companies over several years and with billions of dollars being spent on those refreshes. Cisco's CEO, Chuck Robbins, was confident about the company's path forward according to his comments made during Wednesday's Q2 2026 earnings call. "I believe we are in the early stages of an exciting new opportunity related to refreshing campus networks. I feel strongly we will perform very well in fiscal year 2025," Robbins told investors.
The campus-wide network refresh is being driven by a fundamental misalignment between traditional networking infrastructures that were built prior to AI demands and networking technologies that will support AI both now and in the future. Cisco has aligned its networking portfolio with these various needs to meet the evolving demands for AI supported networks.
Robbins pointed to high levels of demand for next generation switching, routing, and wireless - all of which are ramping at a faster pace than previous product introductions. "We're rolling out AI-native capabilities throughout these products with embedded security woven into the very fabric of the network and modernizing the operation stack of the campus network," he said. Cisco has also performed particularly well in campus, wireless, and edge devices.
Cisco has also seen some of the strongest demand from hyperscalers with AI infrastructure orders totaling $2.1 billion for the same period, representing what Cisco has characterized as a "substantial increase in growth." With an installed base that represents tens of billions of dollars from prior Catalyst generations, many of which will reach their end-of-support shortly, Cisco should have a solid opportunity to benefit from a multi-year equipment refresh.
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