---
title: Cisco Now Expects $9 Billion in AI Revenue From Hyperscalers, Up From $7.5 Billion in August
description: Cisco raised its fiscal 2027 hyperscaler AI revenue outlook to $9 billion as Q1 revenue rose 24% to $18.5 billion and networking grew 43%.
author: Darie Nani (Editor-in-Chief)
date: 2026-11-13T21:14:53.846Z
updated: 2026-11-13T21:14:53.861Z
canonical: https://www.sovereignmagazine.com/article/cisco-earnings-q1-fy2027-hyperscaler-ai-revenue
image: https://cdn.nanimediahouse.com/pexels-side-view-crop-concentrated-african-american-engineer-repair-442152.jpg
categories: Markets
content_type: News
region: Global
publication: Sovereign Magazine
schema_type: Article
about:
  - type: Organization
    name: Cisco
---

Cisco now expects to make $9 billion in fiscal 2027 from the AI infrastructure it sells to hyperscalers, the largest cloud companies. That is $1.5 billion more than the $7.5 billion it forecast in August, and more than double the roughly $4 billion of hyperscaler AI revenue it delivered in fiscal 2026. Cisco gave the new figure on Nov. 12 with its first-quarter earnings for fiscal 2027, less than two weeks after [investors sold off AI-linked technology shares](https://www.sovereignmagazine.com/article/is-the-ai-bubble-bursting-october-2026) at the end of October. In the three months to Oct. 24, revenue rose 24% to a record $18.5 billion, and Cisco raised its revenue and earnings guidance for the full year.

Chuck Robbins, Cisco's chair and chief executive, said the quarter brought the company's strongest revenue and non-GAAP earnings per share growth "in over 15 years." "We are in the very early stages of a multi-year networking supercycle, and we're confident in our ability to continue capturing the multi-billion-dollar opportunity it represents for Cisco," he said.

## Networking Revenue Grew 43%, Up From 28% Growth in the Previous Quarter

Cisco's networking business took in $11.1 billion in the quarter, up 43% from a year earlier and about 60% of total revenue, after growing 28% in the fourth quarter of fiscal 2026. Product revenue as a whole rose 32%, while services revenue rose 1%.

Cisco took $9.3 billion of AI infrastructure orders from hyperscalers in fiscal 2026, $4 billion of them in the fourth quarter. Neocloud, sovereign and enterprise customers placed more than $400 million of AI infrastructure orders in the fourth quarter, bringing their annual total above $1 billion, Futurum Group analysts wrote in August.

## Cisco Raised Its Full-Year Revenue Forecast to $74.8 Billion to $75.8 Billion

Cisco now expects fiscal 2027 revenue of $74.8 billion to $75.8 billion, up from the $72.2 billion to $73.4 billion it forecast in August, which lifts the midpoint from $72.8 billion to $75.3 billion. The $1.5 billion increase in the hyperscaler AI outlook is more than half of that $2.5 billion rise.

First-quarter revenue of $18.5 billion beat the $18.0 billion to $18.2 billion Cisco had guided to in August. For the second quarter it expects revenue in the same $18.0 billion to $18.2 billion range, below the first quarter's result, with non-GAAP earnings per share of $1.34 to $1.36. Non-GAAP earnings per share rose 40% to $1.40 in the first quarter, and Cisco raised its full-year forecast to $5.47 to $5.53, from $5.05 to $5.11. It also returned $3.7 billion to shareholders in dividends and buybacks during the quarter.

## Cisco's Total Gross Margin Met Its Guidance as Product Margin Fell to 63.7%

In August, Cisco guided to total non-GAAP gross margin of 65% to 66% for the first quarter. It came in at 65.6%, inside that range and down from 68.1% a year earlier. Within that total, Cisco's non-GAAP product gross margin fell to 63.7%, from 64.8% in the fourth quarter of fiscal 2026 and 67.2% a year earlier. Cisco expects total non-GAAP gross margin of 65% to 66% again in the second quarter.

Analysts questioned the pressure on Cisco's gross margins in August, The Stack reported, and Cisco shares fell about 6% in pre-market trading after those fourth-quarter results. Futurum Group analysts wrote at the time: "Higher hardware mix and memory costs could continue to pressure product gross margin, making operating leverage an important offset."

Cisco's non-GAAP operating margin was a record 37.8% in the first quarter, above the 35.5% to 36.5% it had guided to, and non-GAAP net income rose 39% to $5.6 billion, faster than the 24% rise in revenue. "As our business continues to scale, we are unlocking significant operating leverage which is enabling us to grow earnings much faster than revenue," chief financial officer Mark Patterson said on Nov. 12.

More on Cisco's results is at [newsroom.cisco.com](https://newsroom.cisco.com/c/r/newsroom/en/us/a/y2026/m11/cisco-reports-first-quarter-earnings.html).

## FAQ

**Q: When does Cisco pay its next dividend?**
Cisco has declared a quarterly dividend of $0.42 per share, to be paid on Jan. 20, 2027, to shareholders of record at the close of business on Jan. 4, 2027. Future dividends are subject to board approval.

**Q: What AI networking equipment does Cisco sell to hyperscalers?**
Mostly networking systems based on its own Silicon One chips, plus optics. Futurum Group put the mix of Cisco's fiscal 2026 hyperscaler AI orders at "roughly 60% Silicon One-based systems and 40% optics."