Cisco Systems closed out its fiscal 2026 with record annual results, powered by a surge in orders tied to artificial intelligence data centers, the company reported Wednesday after markets closed — but investors gave the numbers a mixed reception, sending shares swinging in after-hours trading.

The networking giant posted fourth-quarter revenue of $17.3 billion, up 18% year over year, with GAAP net income of $3.9 billion and GAAP earnings per share of $0.97, beating Wall Street's $0.87 estimate, according to Cisco's earnings release. For the full fiscal year, revenue reached $63.3 billion, up 12%, while net income climbed 30% to $13.3 billion.

AI Orders Beat the Target

Cisco's networking segment — the core of its AI infrastructure pitch — brought in $9.79 billion in the quarter, up 28% year over year, with product orders up 35% overall (25% excluding hyperscale customers), marking the company's eighth consecutive quarter of double-digit order growth. Orders from hyperscale AI data center operators hit $9.3 billion for the full year, topping the $9 billion goal Cisco had set for itself, with $4 billion of that booked in the fourth quarter alone, according to SiliconANGLE.

CEO Chuck Robbins struck a triumphant note: "We delivered a very strong close to fiscal 2026, marking another record year for Cisco," he said in the earnings release. "Cisco is well positioned to support our customers however or wherever they decide to deploy AI."

SHARES FELL, THEN CLIMBED, AS THE MARKET SORTED OUT THE NUMBERS

Despite the beat, Cisco shares initially dropped more than 4% in after-hours trading as some investors focused on the margin pressure that comes with scaling up lower-margin AI infrastructure orders. Shares later pared losses and, in some trading, climbed as high as 6% as the market digested the company's forward guidance more favorably, according to TradingKey's market analysis.

Looking ahead, Cisco guided to fiscal 2027 earnings per share of $5.05 to $5.11 on revenue of $72.2 billion to $73.4 billion — above the roughly $4.83 EPS and $69.1 billion in revenue Wall Street had been expecting. The company also projected AI-related hyperscaler revenue will nearly double to $7.5 billion in fiscal 2027, up from about $4 billion this past year.

The report follows a strong third quarter in May, when Cisco paired a beat with roughly 4,000 job cuts — part of an ongoing narrative in which the company is leaning harder into AI infrastructure spending even as it trims costs elsewhere. Wednesday's results extend that story, giving Cisco one of the clearer "AI winner" cases among legacy tech hardware makers heading into next year.