In its most recent quarter, Cisco reported a 7% year-over-year increase in infrastructure platforms revenue, driven primarily by AI-optimized switching and routing products. The company highlighted that orders for its AI-capable Nexus and Catalyst lines grew more than 35% sequentially, reflecting strong demand from hyperscale cloud providers and large enterprise data centers. Cisco’s service provider segment also saw a 12% lift in software subscriptions tied to network automation and security, underscoring the growing shift toward managed and software-defined networking solutions in AI environments.

Despite these growth drivers, Cisco continues to trade at a valuation multiple near 14x forward earnings, well below the 20x average of comparable networking and infrastructure peers. Analysts note that this discount persists even as Cisco’s operating margin expanded to 24% last quarter—up 150 basis points year-over-year—on higher software revenue mix and cost efficiency initiatives. With free cash flow exceeding $5 billion over the past twelve months and a net cash position, Cisco’s enterprise value-to-EBITDA ratio of 9x further underscores the stock’s appeal for investors seeking exposure to AI networking at an attractive entry point.

Cisco reported a backlog of approximately $8.5 billion at quarter end, marking a 20% increase from the prior year as large projects around AI data center builds and 400Gbps network rollouts ramp up. Management raised full-year guidance for software subscription revenue to a mid-teens growth rate, reflecting expected renewals and new AI management platform deployments. Meanwhile, capital expenditure guidance for customers in 2026 points to continued investment in next-generation network fabric, signaling that Cisco is well positioned to capture the ongoing transition to AI-driven infrastructure.