Cisco Systems Inc

Cisco Systems pushed Splunk AI deeper into tightly controlled enterprise environments with a new AI POD built for on-premises, private-cloud and air-gapped deployments. The validated setup brings together Cisco infrastructure, Nvidia accelerated computing and Kubernetes-based software, letting enterprises run AI workloads without sending sensitive information outside their own environments. Splunk AI Assistant is available now, while Agent Launchpad is scheduled for later this year, and customers can host selected models from Google, OpenAI and Cisco, with Nvidia models expected to follow. Splunk is also adding Tokenomics, a capability designed to track token spending across AI agents and coding tools while estimating future consumption. Cisco shares climbed nearly 3.3% to $111.255 Thursday, though GuruFocus shows the stock trading 49.36% above its GF Value of $74.49, with product pricing and committed customer volumes still undisclosed.

Cisco Systems has pushed Splunk AI deeper into private infrastructure with a new Nvidia-backed AI POD built for self-managed and air-gapped environments. The platform, available now, pairs Cisco infrastructure with Nvidia computing and Kubernetes, while Splunk's Tokenomics tool is designed to track AI spending across agents and employee coding tools and estimate future consumption before the billing cycle closes. Cisco is also widening the commercial opportunity beyond the data center after signing a multiyear agreement with Amazon Web Services to jointly develop security products. Cisco said it received $9.3 billion of hyperscaler AI-infrastructure orders during fiscal 2026, equal to roughly 14.7% of its $63.3 billion annual revenue, though orders are not revenue. Cisco shares were up roughly 0.1% at $110.24.

Cisco Systems is expanding its Splunk portfolio with new artificial intelligence security and observability capabilities after the unit posted double-digit order growth in the fourth quarter of fiscal 2026. Splunk contributed to several whole-portfolio agreements, added more than 280 customer logos and notched its highest number of competitive wins in any quarter of fiscal 2026, pushing Cisco past its full-year target of adding 1,000 Splunk customer logos. The enhancements include Cisco AI POD for Splunk, expanded AI-agent observability, Tokenomics capabilities and stronger agentic security operations, aimed at helping enterprises deploy, secure and monitor agentic AI at scale. More than 1,500 customers bought newer Cisco security products such as Secure Access, XDR, Hypershield and AI Defense in the fiscal fourth quarter, while the acquisitions of Galileo Technologies and Astrix Securities broaden Cisco's observability and security reach. The push puts Cisco up against Datadog, whose AI offerings include Agent Observability, Agent Console, Data Observability, GPU Monitoring and AI Guard, and CrowdStrike, whose Next-Gen SIEM ending ARR surpassed $695 million and whose Falcon Shield ARR surged more than 185% year over year in the second quarter of fiscal 2027. Cisco shares have appreciated 42.9% year to date, and the Zacks Consensus Estimate for earnings stands at $1.32 per share, implying 32% growth.

Cisco unveiled new Splunk advancements at Splunk .conf in Denver, led by an expanded NVIDIA partnership that brings self-managed Splunk AI to on-premises, private cloud, and air-gapped environments. The newest configuration, Cisco AI POD for Splunk, is part of Cisco Secure AI Factory with NVIDIA and is available today, with partners bitsIO, Wipro, and World Wide Technology ready on day one; Splunk AI Assistant is available now and Agent Launchpad is coming later this year. Customers can self-host models including the Cisco Deep Time Series Model, Google Gemma 4, and OpenAI GPT-OSS 20B, with NVIDIA Nemotron open models arriving in the coming months. Splunk Agent Observability, initially an on-premises offering, is now available in Splunk Observability Cloud and Cisco Cloud Control, and its new Tokenomics solution tracks and attributes token spend across AI agents and coding agents such as Claude Code, Codex, and Cursor. Splunk also detailed new agentic SOC capabilities, Exposure Analytics enhancements, and Splunk Enterprise Security Essentials and Premier editions, and said it has formalized a multi-year agreement with AWS to co-develop security solutions against AI-driven attacks.

Cisco Systems has joined Verizon's 6G Innovation Forum, taking part in work on AI native wireless and sensing architectures. The company is also collaborating with quantum company Infleqtion on distributed quantum networking research that uses the Cisco Universal Quantum Switch. Cisco and Infleqtion plan to explore scalable quantum network designs aimed at connecting multiple quantum processing nodes across wider telecom infrastructure. The 6G forum seat keeps Cisco inside the decision room as carriers shape AI native networks, while the quantum research extends Cisco's Quantum Labs work into practical architectures for linking heterogeneous quantum devices across existing telecom gear. Both moves build on Cisco's AI focused networking and integrated security strategy, though they also underline the company's reliance on complex, long dated projects with a concentrated group of large partners.

Verizon announced the expansion of its 6G Innovation Forum with nine new members and reported successful pre-standard field trials of Integrated Sensing and Communication and an AI Sports Companion prototype. Amazon Web Services, Cisco, Intel, Keysight Technologies, MediaTek, NVIDIA, Palo Alto Networks, Rohde & Schwarz and VIAVI Solutions have officially joined the forum, which was launched last year and already includes founding members Ericsson, Samsung, Nokia, Meta and Qualcomm Technologies. In one trial staged at a major international soccer celebration in Dallas, Texas, Verizon and Samsung used a single 5G base station and 40MHz of CBRS spectrum to track radio variations from six Samsung Galaxy smartphones, with Samsung's AI RAN and edge AI platform Network in a Server generating real-time crowd-density heatmaps on commercial phones and a tablet. In a second trial at Qualcomm's San Diego campus, the companies used 100 to 400MHz of millimeter-wave spectrum and four synchronized Transmission and Reception Points to track an airborne drone and moving ground vehicles while maintaining uninterrupted 5G Standalone communications to a phone user on the ground. Verizon also showcased a prototype AI Sports Companion application running on the Verizon Edge Network with Meta AI glasses, a locally optimized Small Language Model, an NVIDIA DGX Spark and statistics from SportsDataIO, letting users ask verbally for real-time player statistics, live score interpretations and game-winning probabilities. Verizon said forum members will continue sharing learnings from future demonstrations involving ISAC, digital twins, robotics, AI and advanced wearables, and it views the 2028 Summer Olympics in Los Angeles as the ultimate interim proving ground on the road to commercial 6G deployment, supported by its dedicated 6G Lab already established in the host city.

Ken Fisher's Fisher Asset Management increased its stakes in Cisco Systems and Palo Alto Networks, according to consecutive SEC filings covering March-to-June changes. Cisco shares rose from 17,301,583 to 33,412,725, while the Palo Alto position increased from 256,661 to 5,755,989 shares. Cisco's fiscal fourth-quarter networking revenue increased 28% to approximately $9.8 billion, with security revenue up 14% to about $2.2 billion and total operating cash flow of $5.4 billion. Palo Alto's September 1 results showed fiscal fourth-quarter revenue up 34% to $3.41 billion and next-generation security annual recurring revenue of $9.10 billion, alongside a $282 million GAAP net loss driven by a fair-value charge on acquired convertible notes. August 14 short interest stood at 1.50% of Cisco's float and 2.79% of Palo Alto's, and the filings disclose no AI thesis behind the positions.

Cisco Systems shares rose about 3.7% to $111.45 on Friday after Nvidia CEO Jensen Huang named cybersecurity as AI's next major opportunity and identified Cisco among Nvidia's partners. Huang, cited by Business Insider, said cybersecurity follows AI coding because digital defenses must stay active around the clock rather than wait for a prompt. Cisco is already benefiting from the AI infrastructure boom, booking $9.3 billion in fiscal 2026 AI orders, of which $4 billion came in its fourth quarter, while quarterly revenue climbed to $17.25 billion from $14.67 billion a year earlier. The stock's $111.45 price sits 49.98% above its $74.31 GF Value estimate, a sharp valuation warning. Cybersecurity could add attractive recurring software revenue on top of Cisco's expanding AI-hardware base, but Huang's endorsement is not a sales contract, and the next test is execution.

Ciena Corporation is guiding for at least 30% revenue growth in fiscal 2027, to between $8.3 billion and $8.4 billion, with adjusted gross margin projected at 45%-46% and adjusted operating margin at 25%-27%. The outlook leans on AI-driven bandwidth demand, and peers are spending at scale: Cisco Systems reported $9.3 billion of fiscal 2026 AI infrastructure orders from hyperscalers and expects $7.5 billion of AI infrastructure revenues in fiscal 2027, while Hewlett Packard Enterprise reported fiscal third-quarter 2026 Cloud & AI revenues of $9 billion, up 25.4%, with AI systems orders up more than 30% sequentially to $2.4 billion. Ciena trades at 35.7X forward 12-month earnings against a five-year median of 25.5X, slightly below the Zacks sub-industry's 36.3X but well above the Zacks Computer and Technology sector's 20.4X and the S&P 500's 19.7X. Supply secured through 2029 requires upstream investment that management expects to reduce fiscal fourth-quarter 2026 operating cash flow, and purchase orders totaled $3.3 billion as of Aug. 1, 2026, with only a portion firm and non-cancelable, while nine-month inventory excess and obsolescence provisions were $72.4 million. Direct cloud-provider revenues were 53% of fiscal third-quarter sales, two cloud providers generated 41.7% of total revenues, and roughly half of the business now comes directly from hyperscalers, leaving the fiscal 2027 plan exposed to hyperscaler budgets and order timing; the stock carries a Zacks Rank #1 (Strong Buy), a Momentum Score of A, a Growth Score of B, a Value Score of F and a VGM Score of C.

Cisco Systems reported fourth-quarter fiscal 2026 non-GAAP earnings of $1.22 per share, up 23% year over year and beating the Zacks Consensus Estimate by 4.27%, on revenues that rose 18% year over year to $17.252 billion. Networking revenues surged 28% year over year to $9.791 billion, driven by triple-digit growth in AI infrastructure, and hyperscaler AI infrastructure orders totaled $4 billion in the quarter, taking fiscal 2026 orders to $9.3 billion, roughly 4.5 times the fiscal 2025 level. Non-GAAP gross margin was 66.3%, down 210 basis points year over year, but non-GAAP operating margin expanded to 35.9% from 34.3% on operating leverage. For fiscal 2027, Cisco projects revenues of $72.2-$73.4 billion and non-GAAP earnings of $5.05-$5.11 per share, with hyperscaler AI infrastructure revenues expected to reach $7.5 billion, up from approximately $4 billion in fiscal 2026. Cisco also returned $3.161 billion to shareholders through $1.502 billion of share repurchases and $1.659 billion of dividends, and carries a Zacks Rank #2 (Buy).

Nvidia CEO Jensen Huang reaffirmed his confidence that the chipmaker can increase revenue by 70% next year, speaking Thursday at Goldman Sachs' Communacopia + Technology Conference. Nvidia's management stunned Wall Street last month when it projected 70% year-over-year revenue growth in 2027, and executives estimated that growth could surpass 100% if the company were able to satisfy all available demand. Huang said demand for AI computing continues to exceed available supply, suggesting Nvidia's biggest near-term obstacle may be production capacity rather than customer appetite. The company is also expanding beyond graphics processors into complete AI factory systems, with the upcoming Vera Rubin platform expected to cost roughly $40,000, compared with about $25,000 for Blackwell and $18,000 for Hopper. Huang said Nvidia is gaining share at Anthropic, the developer of the Claude AI models, in which Nvidia invested in November 2025, and he identified cybersecurity as a likely next growth engine, citing partnerships with CrowdStrike, Cisco Systems and Palantir Technologies, while also pointing to advances in physical AI across robotics and autonomous driving over the next two to three years.

NVIDIA has handed the software running the 1.3 million-part supply chain inside every Vera Rubin rack to Palantir, expanding a partnership that fuses Palantir Foundry and AIP with NVIDIA Nemotron open models grounded in Palantir Ontology. The reference architecture, called SAIOS, runs on hardware from Dell Technologies and Cisco for on-premises deployment, while Rackspace and Nebius enable co-location and cloud options. NVIDIA CEO Jensen Huang called supply chains "the operating system of the physical economy," and Palantir CEO Alex Karp said the sovereign stack is "delivering capabilities that exceed the frontier while providing alpha protection qualities unavailable otherwise." The endorsement lands as Palantir shares traded at $167.15 midday Thursday, down 1.41% on the session, and are down 6.2% year to date even as NVIDIA has climbed 17.52%. Palantir's Q2 FY2026 revenue reached a record $1.94 billion, up 92.83% year over year, with adjusted EPS of $0.41 versus a $0.28 consensus, U.S. commercial revenue up 149% to $764 million, and full-year revenue guidance raised to $8.150 to $8.158 billion, yet the stock carries a P/E of 240 and a market cap near $383.9 billion.

Infleqtion announced a collaboration with Cisco to pursue joint research and development focused on connecting, operating, and scaling quantum systems. The two companies will explore architectures to link individual devices into distributed, more capable networks, an important step toward making distributed quantum systems a reality. The work pairs Infleqtion's neutral-atom quantum computers and sensors with Cisco's networking stack, and Cisco is advancing research on an end-to-end quantum networking stack designed to dynamically distribute quantum entanglement across connected devices on demand, including the recently debuted Cisco Universal Quantum Switch research prototype. The companies intend to explore convergence of sensing and compute, quantum memory and optical transduction, and network-aware quantum software. Representatives from both companies will appear at the Quantum World Congress September 23 to 25 in College Park, Maryland, and the Cisco Quantum Summit October 6 to 7, held virtually.

Palantir Technologies and NVIDIA announced a collaboration to bring sovereign AI to critical supply chains, starting with NVIDIA's own operations. The deployment creates an AI stack that brings NVIDIA Nemotron open models into Palantir Foundry and Artificial Intelligence Platform, grounded in the Palantir Ontology, aimed at creating supply-chain visibility, identifying constraints and guiding decisions at machine speed. NVIDIA operates one of the most complex supply chains, spanning millions of parts, thousands of suppliers and a global network of manufacturing partners, with 1.3 million parts in each NVIDIA Vera Rubin rack. The deployment runs on NVIDIA reference architectures and the jointly developed Palantir Sovereign AI Operating System Reference Architecture, supported by Dell Technologies and Cisco, and can be deployed on premises with Cisco and Dell or in the co-lo and cloud with Rackspace and Nebius. The AI stack and its applications across industries will be showcased at Palantir's AIPCon 11.

Cisco Systems reported that AI agents now consume roughly 60% of global inference capacity, with token usage surging fourteenfold since February. The company delivered $17.3 billion in fiscal fourth-quarter revenue, an 18% increase powered by a 28% jump in networking sales. AI-infrastructure orders from hyperscalers hit $4 billion for the quarter and $9.3 billion for the full year, representing nearly 14.7% of Cisco's $63.3 billion in fiscal-year revenue. Management noted that AI agents require about 450% more network bandwidth than people completing similar tasks. Cisco shares gained approximately 0.3% to $109.59 Wednesday, trading 47.6% above their GF Value estimate of $74.25.

Bell, Canada's largest communications company, has launched Bell On-Demand Network, the country's first Network-as-a-Service platform aligned with Mplify-defined NaaS attributes, enabling customers to order, activate, manage, and scale network services through a single digital experience. The platform's initial offering, On-Demand Internet, is available in Ontario and Québec wherever fibre has been deployed, with additional networking, security, cloud connectivity, and automation capabilities planned over time. Built on Bell's fibre network and powered by Cisco infrastructure, the platform delivers on seven fundamental NaaS attributes: on-demand, observable, manageable, programmable, secure, modular, and flexible. Bell executives Mark McDonald and Costa Pantazopoulos highlighted the platform's ability to give customers real-time control and agility, while Cisco Canada CTO Cherif Gress and Mplify COO Kevin Vachon praised the collaboration and alignment with global NaaS principles.

According to a new report from Dell'Oro Group, campus switch average selling prices grew 19 percent in the second quarter of 2026, driving the market to positive revenue growth despite component shortages. Every vendor outside China raised campus switch ASPs year-over-year, a direct result of AI-fueled component shortages that increased costs and led to list price increases on nearly all campus switches. Cisco, Arista, Ubiquiti, and Extreme all gained market share year-over-year, with vendors excelling at supply management and redesigns outperforming. Public Cloud-managed switch revenue rebounded and outpaced the total market, while memory shortages are expected to persist into 2027, raising ASPs and causing availability issues. Despite supply headwinds, demand remains strong, with switch refreshes and security concerns acting as growth catalysts, and modular switch form factors have seen unusual growth with smaller ASP increases.

Super Micro Computer shares surged 31.3% in August after the company reported strong fiscal fourth-quarter earnings, completed an internal investigation into illegal server shipments to China, and announced a partnership with Cisco. The investigation cleared senior management of wrongdoing, easing governance concerns. Revenue rose 91.7% year over year to $11.1 billion, slightly missing estimates, but adjusted earnings per share of $1.70 beat by $0.74. Gross margins nearly doubled to 17.5%, exceeding the company's traditional target range, driven by a shift to enterprise servers and higher-margin data center building block solutions. Management forecast revenue of $65 billion to $72 billion for the current fiscal year, well above analyst expectations of $53 billion. The stock still trades at only nine times forward earnings, making it one of the cheapest AI hardware stocks.

Super Micro Computer has announced a new partnership with Cisco to supply high-density liquid and air-cooled compute systems for AI infrastructure, integrating its systems into Cisco's Secure AI Factory architecture, which utilizes NVIDIA technologies for enterprise, neocloud, and sovereign cloud customers. This collaboration broadens Super Micro's access to rack-scale and dense GPU systems validated for Cisco's AI offerings, positioning the company within the hardware layer of AI infrastructure. The deal supports Super Micro's narrative of winning recurring, high-value rack-scale orders as AI infrastructure is deployed globally, while also raising concerns about hardware commoditization and price wars, as Cisco will influence system design and pricing. Analysts have flagged margin stability as a concern, questioning whether Super Micro's modular, liquid-cooled offerings can maintain differentiation within Cisco's portfolio.

Advanced Micro Devices, Cisco Systems, and HUMAIN have expanded their artificial intelligence infrastructure collaboration in Saudi Arabia, with AMD Instinct MI355X GPU-based systems now live and serving customers in the Kingdom and overseas. The companies plan to deploy up to 250 megawatts of additional AI infrastructure beginning in 2027, using AMD Instinct MI400 Series GPUs, EPYC CPUs, and ROCm software, with capacity expected to come online in the second half of 2027. This is part of a larger joint venture aiming to deploy up to 1 gigawatt of AI infrastructure by 2030, targeting sovereign AI demand. AMD's Data Center revenues surged 107% year over year to $6.7 billion in second-quarter 2026, and the company expects server revenues to grow more than 70% in 2027. However, AMD faces tough competition from NVIDIA, whose Data Center revenues reached $89 billion in second-quarter fiscal 2027, and Broadcom, whose AI semiconductor revenues surged 143% to $10.8 billion in the same period.

Advanced Micro Devices, Cisco Systems, and Saudi Arabia's HUMAIN announced on Monday that AI computing capacity built around AMD's Instinct MI355X chips and Cisco's networking hardware is now live in the kingdom, serving paying customers. The system, which combines AMD's Instinct MI355X graphics processors and EPYC server chips with Cisco's Silicon One networking chips and 800G optics, is being used by HUMAIN, the AI arm of Saudi Arabia's roughly $1 trillion Public Investment Fund, to sell GPU capacity to customers inside and outside the kingdom. The joint venture, announced in November 2025, has moved from announcement to live production workloads in under a year, with HUMAIN CEO Tareq Amin highlighting the milestone as proof of the company's ability to build and deliver advanced AI infrastructure at scale. A second phase of up to 250 megawatts, using AMD's newer Instinct MI400 series chips, is due to begin deployment in 2027, with the joint venture still targeting up to 1 gigawatt of capacity by 2030. However, every future chip shipment still depends on individual U.S. export approval, as Washington authorized HUMAIN to buy the equivalent of up to 35,000 Nvidia Blackwell chips in November 2025 on a case-by-case basis, and Saudi Arabia was left out of a July 2026 reclassification that moved the United Arab Emirates into the top tier of U.S. export trust. AMD's data center revenue hit $5.8 billion in the first quarter and accelerated to $6.7 billion in the second quarter, up 107% year-over-year, though it still trails Nvidia's roughly $89 billion in second-quarter AI chip revenue, and AMD's stock has more than doubled over the past year, pushing its market cap toward $900 billion by mid-2026.

Jim Cramer warned on Mad Money that AI exposure is making even supposedly diversified portfolios more concentrated, reclassifying Caterpillar as a data center stock after its Power Generation revenue surged 29% and shares rose 90% over the past year. He suggested TJX and Wells Fargo as replacements to balance exposure, noting that true diversification requires separating end-market drivers, not just sector labels. Caterpillar reported its first-ever $20 billion sales quarter in Q2 2026, with revenue of $20.54 billion, up 23.98% year over year, and adjusted EPS of $8.17 versus a $6.20 estimate. The company's backlog expanded $9 billion sequentially to $72 billion, with some orders placed as far out as 2030. Cramer's point extends to other names: Generac's data center backlog hit $1.6 billion, Cisco took $4 billion of hyperscaler AI infrastructure orders in Q4 FY26, and Micron, up 227.94% year to date, reported fiscal Q3 revenue of $41.5 billion. The takeaway is that Caterpillar's data center exposure can reinforce an existing AI bet rather than offset it, so adding a name like TJX could reduce concentration without abandoning technology holdings.

Broadcom Inc. announced VMware AI Factory, a software-defined foundation for VMware Private AI Cloud, at VMware Explore 2026, aiming to accelerate time to production AI and improve control over AI tokenomics. The platform automates infrastructure deployment and lifecycle management, reducing bare metal to first model time from weeks to hours. It includes private AI services such as multi-tenant model sharing, an AI Gateway, and secure AI sandboxes, and supports over 150 models including Nemotron 3, Gemma 4, and Qwen 3.7-Max. Broadcom also partnered with MetalSoft to cut bare-metal provisioning from weeks to minutes, and is collaborating with AMD to integrate Instinct GPUs and ROCm software. The offering is compatible with certified AI ReadyNodes from Cisco, Dell, Lenovo, and Supermicro.

Jim Cramer has issued his clearest endorsement yet for Cisco, saying "buy, buy, buy" on the Aug. 27 Mad Money Lightning Round, citing a strong quarter and dismissing concerns about conservative guidance. Cisco's fiscal 2026 results showed revenue of $63.3 billion, up 12% year-over-year, non-GAAP EPS of $4.33, up 14%, and GAAP EPS of $3.33, up 31%, with the company achieving its highest productivity metrics in 30 years. The company also reported $9.3 billion in total AI infrastructure orders for the year, delivering approximately $4 billion in revenue, and guided fiscal 2027 revenue to $72.2-$73.4 billion with non-GAAP EPS of $5.05-$5.11. Morgan Stanley maintains an Overweight rating with a $135 price target, highlighting Cisco's TSMC procurement advantage, while the average analyst target of $141.21 implies roughly 28% upside from the current price of $109.93. Cisco also declared a quarterly dividend of $0.42 per share, payable Oct. 21, 2026.

Cisco Systems has launched a Sovereign Critical Infrastructure portfolio in Canada and expanded its Secure AI Factory through partnerships with NVIDIA and Supermicro, targeting sectors requiring national control of data and networks. The expanded offering supports liquid-cooled, high-density AI infrastructure for enterprises, neocloud providers, and sovereign cloud customers. Cisco will sell pre-validated combinations of Supermicro GPU servers, liquid cooling, and Cisco Silicon One or NVIDIA Spectrum X switches, positioning it for high-density AI cluster projects. Investors should watch for disclosed AI infrastructure order figures and customer wins, especially after Supermicro systems become available from October 2026, as well as adoption of the Canadian sovereign portfolio as an indicator for other regions.

JPMorgan Private Bank's Stephen Parker told CNBC that the AI-driven market rally is broadening beyond the Magnificent Seven, with infrastructure providers and other sectors taking the lead. Parker noted that while the Mag-7 is barely up this year, markets continue to hit new highs, and companies like Quanta Services, GE Vernova, Eaton, and Cisco are seeing record backlogs and strong earnings. Quanta Services beat Q2 earnings by nearly 40% with a record $53.44 billion backlog, GE Vernova's data-center orders more than doubled year-to-date, Eaton's data-center backlog represents 15 years of supply at current US build rates, and Cisco booked $9.3 billion in AI infrastructure orders for FY2026. Parker also highlighted AI's role in driving growth and efficiency across industries, citing Walmart's strong quarter and JPMorgan's robust consumer loan demand as evidence of broad-based strength.

Cisco Systems has broken its biggest hardware rule by selling AI server hardware directly through a new partnership with Super Micro Computer, pulling the company deeper into a business it traditionally left to others. Announced Tuesday, Cisco is expanding its Secure AI Factory with Nvidia architecture to include Supermicro's liquid and air cooled server systems, which will be sold and validated as part of Cisco's own AI infrastructure portfolio. The combined stack becomes compliant with Nvidia's Cloud Partner program, a credential neoclouds and sovereign cloud operators look for before signing large contracts. Cisco President and Chief Product Officer Jeetu Patel said the industry is at the state of "one of the largest datacenter buildouts in history." Cisco shares rose roughly 1% Tuesday, while Supermicro jumped about 9%. Twenty-six analysts polled by S&P Global rate Cisco a consensus Buy with an average price target near $133, and Morgan Stanley reiterated an Overweight rating and a $135 price target. Supermicro's fiscal fourth quarter revenue reached $11.1 billion, up from $5.8 billion a year earlier, with gross margin recovering to 17.5% from 9.5%, and the company guided fiscal 2027 revenue to a range of $65 billion to $72 billion. Cisco disclosed no committed order volume or pricing, and Supermicro's systems become available through Cisco's channel starting in October 2026.

Cisco Systems is expanding its Secure AI Factory with NVIDIA, embedding security directly into the AI infrastructure stack to counter rivals Palo Alto Networks and Fortinet. The architecture combines Cisco networking, NVIDIA AI infrastructure, and Supermicro rack-scale compute, with security built from silicon through applications and AI agents. Cisco's security revenues rose 14% year over year to $2.23 billion in the fourth quarter of fiscal 2026, and firewall orders grew over 30%. The company added more than 6,400 net new customers for products like Secure Access, XDR, Hypershield, and AI Defense since launch. Fortinet's SASE Firewall business grew 34% to over $2 billion in the second quarter of 2026, while Palo Alto's Prisma AIRS surpassed 300 customers in the third quarter of fiscal 2026. Cisco shares are up 44.2% year to date, and the Zacks Consensus Estimate for fiscal 2027 earnings is $5.11 per share, up 7% over the past 30 days.

Lumentum is accelerating its transition to 1.6T transceivers and 200G-per-lane optical technology as hyperscalers deploy bandwidth-intensive AI clusters. The company began shipping 1.6T transceivers in the fourth quarter of fiscal 2026, with the bulk of cloud transceiver shipments still at 800G, and expects adoption to intensify from the first quarter of fiscal 2027 through calendar 2027. Lumentum's 200G-per-lane Electro-absorption Modulated Laser products already account for more than 25% of EML revenues, and the company expects 200G EMLs to represent 50% or more of volume by mid-2027. To capture demand, Lumentum is expanding capacity across its two indium-phosphide wafer fabs in Japan and expects more than 50% year-over-year EML unit growth in the December 2026 quarter. However, Cisco is strengthening its competitive position through Acacia optics and Silicon One-based AI networking, with Acacia generating more than $1 billion in fiscal fourth-quarter orders, while NVIDIA's Data Center networking revenue nearly tripled year over year to $15 billion. Lumentum shares have appreciated 125.3% year to date, and the Zacks Consensus Estimate for earnings is $4.23 per share, up 67 cents over the past 30 days.