Cisco Q4 Earnings Preview: AI + Security Driving the Comeback?

Cisco ($CSCO) is set to report its fiscal Q4 results this Wednesday after the bell, and expectations are running a bit higher than usual, given the company’s recent turnaround after a challenging fiscal 2024.

Wall Street expects revenue of about $14.6B (+7% YoY) and adjusted EPS of $0.98 (+12% YoY)—marking a third consecutive quarter of profit acceleration.

Over the past two quarters, Cisco has managed to accelerate top-line growth again, thanks to two big drivers: networking demand recovery and a rapidly expanding security business.

The latter got a major boost from last year’s $27B acquisition of Splunk, which not only brought a strong software revenue stream but also positioned Cisco more firmly in the observability and threat detection market.

In Q3, networking revenue rose 8% to $7.07B—slightly ahead of expectations—while security revenue surged 54% to $2B. Part of that growth came from AI-related infrastructure orders, which added over $600M in sales.

The AI angle is becoming increasingly central to Cisco’s strategy: from government-certified Meraki cloud solutions to the Duo IAM identity security platform, the company is embedding AI across product lines to improve automation, threat detection, and network efficiency.

Looking ahead to Q4, analysts are penciling in more steady gains:

Network products – $7.19B (+5.6% YoY)
Security products – $2.2B (+23.2% YoY)
Services – $3.88B (+2.6% YoY)
Observability products – $288.6M (+16.4% YoY)

These numbers suggest Cisco’s growth is becoming more balanced across segments, rather than relying on a single product line.

From a market standpoint, CSCO stock is up nearly 20% year-to-date—roughly matching Dell’s ~20% gain and well ahead of Hewlett Packard Enterprise (-3%), while slightly outperforming the broader Computer & Technology sector. Analysts have an average price target of $72.91, versus the current $70.67. Notably, Cisco has beaten revenue estimates in every quarter for the past two years, on average by about 0.7%.

The bigger question now is sustainability. AI infrastructure orders have been a nice boost, but they can be lumpy. Meanwhile, the Splunk acquisition adds both growth potential and integration risk. On the positive side, networking demand is getting tailwinds from hyperscale infrastructure upgrades, industrial networking projects, and federal government contracts.

If Cisco can keep executing on both AI and security while managing its integration pipeline, fiscal 2026 could see continued momentum—possibly even double-digit EPS growth. But if AI-related demand eases or networking budgets tighten, the growth pace could slow.

Personally, I think the stock still has room in the medium term given the diversified growth drivers and a healthier product mix than we saw two years ago. That said, forward guidance this week will be the real tell—especially around security revenue expectations and Splunk synergies.