Cisco (NASDAQ:CSCO), the networking and communications technology powerhouse, is set to release its second-quarter fiscal 2026 earnings on Feb. 11 after the market closes. Cisco stock has benefited from the AI trade, rising 38% over the past year. However, investors should temper expectations, as Cisco’s market cap of $342.9 billion remains far below its peak of $536.4 billion during the dot-com boom.
Cisco Q2 2026 Expectations
Wall Street expects Cisco’s Q2 earnings to reach $1.02 per share on revenue of $15.11 billion. This would reflect an 8.5% increase in earnings and 7.9% in revenue year-over-year (YoY), a significant improvement over the company’s 10-year average CAGRs of 0.75% for earnings and 1.52% for revenue. Cisco’s guidance anticipates revenue and EPS ranges of $15 billion–$15.2 billion and $1.01–$1.03, respectively.
Cisco’s First-Quarter Recap
In Q1 fiscal 2026, Cisco beat both revenue and earnings expectations. Revenue came in at $14.9 billion (+7.5% YoY), and EPS rose 10% to $1, slightly above the Street estimate of $0.98. Remaining performance obligations (RPO) totaled $42.9 billion, up 7% YoY, with product RPO increasing 10% and service RPO 4%.
Net cash flow from operations fell 12.3% YoY to $3.2 billion, leaving a cash balance of $8.4 billion, above short-term debt of $6.7 billion. Cisco declared a dividend of $0.41 per share, paid Jan. 21, with a dividend yield of 1.93%, above the sector median of 1.07%. The company has raised dividends consecutively for 14 years. For fiscal 2026, Cisco forecasts revenues of $60.2–$61 billion and EPS of $4.08–$4.14.
Cisco’s AI Strategy: Splunk and Silicon One
To capitalize on the AI boom, Cisco acquired data intelligence platform Splunk for $28 billion, its largest deal in company history. Splunk specializes in analyzing unstructured “machine data” from servers, routers, applications, and sensors, offering organizations deep insights into AI workloads. The integration of AI-Ready PODs enables real-time monitoring of GPU utilization, temperature, and latency in large language model (LLM) responses.
Cisco is also advancing its Silicon One programmable ASIC architecture, a unified platform spanning the full network stack. Silicon One allows software updates instead of costly hardware replacements, optimizing network performance for AI applications. The G300 series promises up to 28% faster job completion times. Cisco expects $3 billion in AI infrastructure revenue for fiscal 2026, representing 50% YoY growth, and is expected to announce shipping its one-millionth Silicon One chip during the Q2 earnings call.
Analyst Outlook on Cisco Stock
Analysts rate Cisco stock as a “Moderate Buy.” Of 24 analysts covering Cisco stock, 15 give a “Strong Buy,” one a “Moderate Buy,” and six a “Hold.” The high target price of $100 suggests about 16% upside from current levels, reflecting measured optimism tied to Cisco’s AI and infrastructure initiatives.
The Bottom Line on Cisco Stock
Cisco stock earnings on Feb. 11 will be closely watched, as investors assess how AI strategy, Splunk integration, and Silicon One growth can translate into meaningful revenue and margin expansion. While Wall Street sees potential upside, the market is cautious, mindful of Cisco’s historical challenges in fully capitalizing on technological shifts.
Cisco is navigating a delicate balance: leveraging its legacy in networking while innovating aggressively in AI infrastructure, aiming to secure a leading role in the rapidly evolving enterprise technology landscape.
Looking ahead, investors will be closely watching not only the raw Q2 numbers from Cisco but also guidance and commentary from management regarding AI adoption, cybersecurity solutions, and enterprise digital transformation. Cisco’s ability to integrate Splunk effectively and expand Silicon One adoption across large-scale AI workloads could be a defining factor in sustaining long-term growth. While near-term upside is modest, these strategic moves position the company to capture an increasingly critical slice of the AI-driven networking and analytics market. For investors, the key takeaway is that Cisco stock may offer steady, long-term potential, even if short-term volatility persists amid broader market uncertainties, competitive pressures, and evolving technology trends.
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