Cisco is scheduled to announce its fiscal 2026 second-quarter results after the U.S. market closes on Wednesday. Wall Street analysts project earnings per share of $1.02, marking an 8.5% increase compared to the same period last year. Revenue is anticipated to reach $15.12 billion, reflecting an 8.1% year-over-year growth.

Analysts forecast that revenue from the Networking product business could hit $7.74 billion, a 13% increase. Observability product revenue is expected to be $298.26 million, up 7.7%, while Security product revenue is projected at $2.15 billion, a 2% rise. Conversely, Collaboration product revenue is predicted to decline by 1.2% to $984.25 million. Total product revenue is forecast to be $11.26 billion, a 10.1% increase. Service revenue is estimated to grow by 2.6% to $3.85 billion.

The company's non-GAAP gross profit is projected to be $7.56 billion, higher than the $6.92 billion reported a year ago. The non-GAAP gross profit for the Services business is expected to reach $2.73 billion, surpassing the previous year's $2.69 billion.

While Cisco experienced declines in both profit and revenue in fiscal 2024, it returned to year-over-year growth starting in fiscal 2025. Following its earnings report last November, the company's stock price saw a significant surge. For the quarter ended October, earnings per share grew 10% to $1.00, and revenue increased 8% to $14.9 billion. The Networking business was the fastest-growing segment, expanding 15% to $7.8 billion.

After years of stagnation following the dot-com bubble burst, Cisco's recovery has been fueled by successful business diversification. Through acquisitions such as Webex, AppDynamics, and Splunk, the company has effectively broadened its focus from networking hardware into software and services. Furthermore, over the past year, Cisco's stock performance has outpaced the broader market, continuing to benefit from the AI investment cycle, notably highlighted by a $1.3 billion order for AI infrastructure.

Investors will be focused on management's commentary regarding the momentum of its AI infrastructure business and its backlog. As of the end of October, the company's remaining performance obligations stood at $42.9 billion, a 7.2% year-over-year increase.

Last week, UBS analyst David Vogt reaffirmed a "Buy" rating on Cisco with a $90 price target. Based on industry checks, the analyst expects revenue to exceed his previous forecast of $15.05 billion, driven by improvements in the core enterprise market. Vogt anticipates product order growth will be close to double digits, compared to a 13% increase in the previous quarter. While AI orders are difficult to predict, Vogt noted that one of Cisco's key AI partners, Meta Platforms, reported fourth-quarter 2025 capital expenditure of $22.1 billion, a 49% year-over-year increase, and announced a median 2026 capital expenditure expectation of $125 billion, representing a nearly 73% increase. Given that fiscal first-quarter 2026 AI orders benefited from an "exceptionally strong" transceiver order of approximately $650 million, Vogt conservatively projects Cisco's AI orders will be roughly flat sequentially at around $1.3 billion, accounting for about 20% of its fiscal 2026 AI order target of $6.2 billion.

Simultaneously, Evercore ISI analyst Amit Daryanani reiterated an "Outperform" rating on Cisco with a $100 price target. Following Cisco's AI Summit, the analyst highlighted that the company offers a range of solutions, including Silicon One's G200, P200-based systems, and optical modules (Acacia), which help drive the transition to pluggable solutions and the shift from copper to fiber. Daryanani also emphasized Cisco's offerings in the security business. Overall, he believes the ongoing AI infrastructure build-out is favorable for Cisco, and this, combined with an "increasingly optimized software layer built around agentic AI," will positively impact the company's development.

Ahead of the fiscal Q2 2026 earnings release, the Wall Street consensus rating for Cisco stock is "Strong Buy," based on 11 "Buy" ratings and 3 "Hold" ratings. The average price target for Cisco stock is $90.80. The stock offers a dividend yield of 2.1%.

However, Cisco still faces risks, including customers delaying technology upgrades or major cloud providers slowing their investment pace. If the company's outlook disappoints, the pre-earnings stock price rally could reverse quickly. Investor concerns persist regarding the lag between AI investments and actual profit realization. According to data from the TipRanks options tool, options traders anticipate that Cisco's stock price will experience a movement of approximately 5.97% following the release of the Q2 FY2026 earnings report.