Cisco raises forecast as AI infrastructure orders jump

Cisco is today’s key AI infrastructure story after raising its annual revenue outlook and pointing to stronger hyperscaler demand. The company now expects AI infrastructure orders from hyperscalers to reach around $9 billion in fiscal 2026, up from its earlier $5 billion target. Networking product orders rose more than 50%, while data-centre switching orders rose more than 40%.

Winners

AI networking and data-centre switching

This group could benefit because AI clusters need huge amounts of data to move quickly between GPUs, servers and storage systems. That makes high-speed networking, switching and routing more important. $CSCO is the direct winner because the news validates its AI infrastructure push. $ANET could benefit as a leading AI data-centre networking name. $HPE could attract interest as enterprise networking and AI infrastructure become bigger parts of tech budgets.

Names: $CSCO (Cisco), $ANET (Arista Networks), $HPE (Hewlett Packard Enterprise)

Optical networking, interconnects and custom silicon

This group could benefit because AI data centres need faster connections, stronger bandwidth, lower latency and better optical transport. Cisco’s focus on silicon and optics supports the idea that AI demand is moving deeper into the supply chain. $MRVL has exposure to data-centre connectivity and custom silicon. $AVGO is tied to networking chips and custom AI infrastructure. $CIEN could benefit as AI traffic increases optical networking demand.

Names: $MRVL (Marvell Technology), $AVGO (Broadcom), $CIEN Ciena)

Cybersecurity and enterprise AI infrastructure

This group could benefit because more AI workloads, cloud traffic and data-centre activity can create more security risks. As companies modernise networks, they need stronger protection across endpoints, cloud workloads, identity and traffic. $PANW could benefit from security consolidation. $CRWD could gain from workload protection demand. $ZS could benefit from zero-trust security adoption.

Names: $PANW (Palo Alto Networks), $CRWD (CrowdStrike), $ZS (Zscaler)

Losers

Slower-growth enterprise hardware and storage

This group could face pressure if traders rotate toward companies with clearer AI infrastructure momentum. $HPQ is more exposed to PCs and printing, which may look less exciting than AI networking. $NTAP and $WDC need to prove that AI storage demand can become stronger growth and margins.

Names: $HPQ (HP Inc.), $NTAP (NetApp), $WDC (Western Digital)

IT services and consulting names

Cisco is cutting jobs while shifting investment toward AI. That could make investors question whether large enterprises are redirecting budgets from labour-heavy services toward automation, infrastructure and platforms. $ACN, $CTSH and $IBM have AI strategies, but the market may separate AI infrastructure sellers from traditional consulting models.

Names: $ACN (Accenture), $CTSH (Cognizant), $IBM (IBM)

AI software names with less direct infrastructure exposure

These companies are not necessarily weak, but traders may favour physical AI infrastructure names in the short term. Cisco’s update is about demand for networking, switching, optics and security. Software names need to prove that AI features are turning into paid adoption and revenue growth.

Names: $CRM (Salesforce), $ADBE (Adobe), $NOW (ServiceNow)

Final takeaway: Cisco’s update suggests the AI trade is moving into a second phase beyond GPUs, into switches, routers, optics, custom silicon, cybersecurity, storage, cooling and full data-centre architecture.

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