Shares of Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) are up roughly 17% in early Thursday trading, putting the stock near $119 after a close of $101.87 on May 13. The jump follows a fiscal third-quarter report that decisively reframed the AI networking competitive narrative.
The move makes Cisco the clear single-day leader in networking infrastructure. By comparison, Hewlett Packard Enterprise (NYSE:HPE) is up 6% to $34 and Arista Networks (NYSE:ANET) is up 2% to $143.
Cisco’s market cap sits near $402.4 billion heading into the session, and today’s gap higher will widen the gulf further. The pre-market surge positions Cisco to extend its lead over networking peers.
Hyperscaler Order Surge Fuels the Rally
Cisco reported record Q3 FY2026 revenue of $15.84 billion, up 12% year over year, with non-GAAP EPS of $1.06 versus the $1.04 consensus. That’s Cisco’s fourth consecutive EPS beat.
The headline catalyst is the AI infrastructure order guide. Cisco raised its FY2026 AI infrastructure order target to $9 billion, up from $5 billion, and lifted FY2026 revenue guidance to $62.8 billion to $63 billion. The company has already booked $5.3 billion in AI infrastructure orders year-to-date (YTD).
CEO Chuck Robbins stated, “Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI.” Cisco’s management also announced plans to cut nearly 4,000 jobs, framed as a reallocation toward silicon, optics, security, and AI.
Peers Diverge on the AI Networking Read-Across
The story is more nuanced across the peer set. HPE stock is up 34% YTD, narrowly ahead of Cisco stock, which is up 32% YTD.
Arista, widely viewed as the premier AI networking pure-play, is a comparative laggard as it’s up 7% YTD. Cisco’s hyperscaler order acceleration directly challenges the long-running bull case that Arista was steadily taking AI networking share at Cisco’s expense.
HPE has its own tailwinds. Its Q1 FY2026 networking segment surged 152% to $2.71 billion on the Juniper integration, with data center networking up 383% year over year. That makes today’s Cisco report more of a sector validation than a zero-sum blow for HPE.
What to Watch Into the Close
The question now is whether Cisco stock’s 17% pop holds through the bell or fades as the initial enthusiasm cools. Reddit sentiment has already drifted from very bullish (82) on May 12 to neutral (49) by Thursday morning, with a viral r/stockmarket thread drawing dot-com era valuation parallels.
Watch for whether sell-side analysts mark up FY2027 estimates to reflect the doubled hyperscaler order target. Read-through to Arista is the bigger competitive question, since hyperscalers routing more Ethernet spend to Cisco would pressure Arista’s premium multiple. HPE shares, by contrast, may track on their own Juniper-fueled momentum rather than Cisco sympathy.
Cisco’s $0.42 quarterly dividend and $9.6 billion remaining buyback authorization keep the capital-return story intact. The next checkpoint is the Q4 FY2026 print and any updated hyperscaler order commentary.
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