Cisco is scheduled to report fiscal Q3 results on May 13, driven by robust demand for AI-optimized networking hardware and software. Management has highlighted that integration of generative AI workloads into enterprise data centers is lifting average selling prices across its Catalyst and Nexus switching portfolios.

Despite healthy AI tailwinds, Cisco faces intensified rivalry from Arista Networks, Dell Technologies and Hewlett Packard Enterprise. Those peers are also investing heavily in AI-capable infrastructure, which could cap Cisco’s share gains and pressure pricing dynamics in key enterprise segments.

Gross margins may remain under pressure as supply chain costs and component shortages strain profitability. Broader economic headwinds, including tighter IT budgets and uneven data-center spending, could further limit upside in Cisco’s guidance for the back half of the fiscal year.