A decade ago, major cloud service providers showed limited interest in Cisco's networking hardware. However, as cloud vendors continue to intensify their investments in GPU computing power, the situation is shifting. Cisco's stock fell 5% after releasing its fourth-quarter fiscal results. Although the company reported strong revenue growth and noted that cloud service provider customers are increasing purchases of Cisco's AI networking chips and switches, driving business growth, this failed to boost the stock price.

During the earnings call, Cisco CEO Chuck Robbins stated that cloud service providers are beginning to purchase Cisco's AI chips and network switches to facilitate high-speed data transmission between GPU computing clusters. With this networking equipment, cloud vendors can maximize the utilization of high-priced, scarce GPU chips sourced from suppliers like Nvidia. In the first three quarters of the fiscal year, Cisco secured $5.3 billion in AI product orders from cloud service providers; in the fourth quarter alone, new orders totaled $4 billion.

In the previous fiscal year, Cisco's AI-related products generated $4 billion in revenue, and the company expects this figure to climb to $7.5 billion in the current fiscal year. This trend has significantly boosted Cisco's revenue growth over the past year. In the fiscal quarter ending in July, Cisco reported revenue of $17.3 billion, an 18% year-over-year increase, surpassing the company's previous guidance by approximately $500 million. In comparison, revenue growth in the first quarter of the fiscal year was only 8%. Total revenue for the full fiscal year grew 12% year-over-year, reaching $63.3 billion.

Cisco forecasts 21% revenue growth for the current fiscal quarter, with a range of $18 billion to $18.2 billion. Full-year total revenue is expected to reach $73.3 billion, representing a year-over-year growth rate of approximately 16%.