When we talk about an AI cluster, we usually picture the GPUs. But the thing that ties tens of thousands of GPUs into a single supercomputer is the switch — the box that acts as the traffic junction for data. And its heart is a tiny "switch silicon" chip that sets how widely and quickly the whole cluster can move data between its parts. This lesson zooms in on just this layer — the electrical-side switch chips and systems (Ethernet vs InfiniBand) where Broadcom, Nvidia, and Arista are colliding with hundreds of billions of dollars. (The "optical" side lives in the sibling lesson Optical Interconnect.)
Amphenol AI Datacom Sales Surge 89% as CommScope Adds $1.2 Billion
Amphenol's IT datacom business, which represented 43% of the company's total sales in the second quarter of 2026, saw revenues surge 89% year over year and 63% organically, with management saying the AI revenue run rate has reached roughly $10.5-$11 billion. Management noted that virtually all of the 22% sequential IT datacom growth in the quarter came from AI-related products, as customers require more copper, optics and power for larger, more complex AI clusters. The company's acquisition of CommScope contributed more than $1.2 billion in sales in the quarter, with CommScope's IT datacom business nearly doubling year over year; management expects that market to account for just under half of CommScope's 2026 sales, compared with roughly one-third in 2025. Amphenol faces tough competition from TE Connectivity, whose Digital Data Networks sales rose 34% year over year in the third quarter of fiscal 2026 with bookings up more than 70% year to date, and from Marvell Technology, whose data-center revenues increased 46% year over year to $2.17 billion in the second quarter of fiscal 2027. Amphenol shares have risen 16% year to date, trailing the broader Zacks Computer and Technology sector's 17% gain, and trade at a forward 12-month price/earnings of 25.32X versus the sector's 20.38X, while the Zacks Consensus Estimate for earnings stands at 72 cents per share, up 5 cents over the past 30 days and implying 53.19% growth.
HPE's $700 Million AI Networking Backlog Tests Supply Chain
Hewlett Packard Enterprise is sitting on a record pile of AI networking orders it cannot yet ship, and the gap between bookings and revenue is now the central question for the stock. Orders for the Networks for AI portfolio reached $700 million in fiscal Q3 2026, a new high, after the company blew past its cumulative fiscal 2026 target of at least $2 billion and raised that target to $2.5 billion to $3 billion. The hardware behind those orders includes routers and switches HPE is supplying to Oracle for one of the largest AI cloud infrastructure build-outs, work that extends more than a decade of engineering between Oracle and Juniper Networks, the business HPE acquired last year. Networking revenue rose 10% in fiscal Q3 2026 against a prior-year base that includes Juniper Networks, while networking orders rose 36%, and the segment brought in $2.9 billion of the $12.2 billion in total revenue HPE reported for the quarter. Management attributes the gap to supply, citing memory and wafer capacity that have gated supply since the start of fiscal 2026, and HPE has more than doubled its networking purchase commitments quarter over quarter while signing multiyear supply agreements to lock capacity. Networking revenue growth is guided to 11% to 13% in fiscal Q4 2026 and 14% to 17% in fiscal 2027, with the next scheduled look at the business coming at the Networking Investor Day on September 30, 2026.
Arista Networks Raises Full-Year Revenue Outlook on Strong AI Data Center Demand
Arista Networks raised its full-year revenue outlook, citing continued robust demand for AI data center networking infrastructure. The company, which trades on the NYSE under ANET, said the higher guidance reflects management's expectation of a bigger top-line number for the current financial year. Management highlighted Arista's role in AI data center buildouts, and the company's AI data center focus sits within a much broader communications infrastructure footprint spanning data centers, AI clusters, campuses, and routing setups across the Americas, EMEA, and Asia-Pacific. Investors are watching whether upcoming quarters keep revenue above the US$3b mark and show continued strength in AI related switching and routing orders, along with how much of that business comes from a small group of hyperscale customers, since concentration there could still swing results either way. The update leaves intact existing risks around customer concentration and tougher competition from Cisco and NVIDIA.
CoreWeave Deploys NVIDIA Vera Rubin NVL72 Clusters on Its Cloud
CoreWeave deployed multi-rack NVIDIA Vera Rubin NVL72 clusters on CoreWeave Cloud on Wednesday, moving the architecture from validation toward broader availability. CoreWeave had already become the first cloud provider to bring up and validate NVIDIA's Vera Rubin NVL72, and in August it won a multi-year agreement with Hudson River Trading to build its next-generation AI research and model-development platform using Vera Rubin NVL72 and Spectrum-X Ethernet. NVIDIA says Rubin is in full production and is designed for training and inference. CoreWeave said AI products and services beyond GPUs, including storage, CPU, networking and software, exceeded $400 million of annual recurring revenue in the second quarter, while booked annual recurring revenue for managed inference rose from $1 million to more than $100 million within months of launch. Active power exceeded 1.5 gigawatts in the second quarter and contracted power reached about 4.2 gigawatts by Aug. 11, with CoreWeave targeting more than 1.85 gigawatts of active power by year-end 2026 and at least 8 gigawatts by 2030, against expected 2026 capital expenditures of $35-$39 billion and second-quarter net interest expense of $640 million.
Marvell Data Center Revenue Hits Record $2.17 Billion, 79% of Total
Marvell Technology's data center business reached a record $2.17 billion in the second quarter of fiscal 2027, up 46% year over year and 18% sequentially, and accounted for 79% of total company revenues. The data center end market made up 74% of Marvell's fiscal 2026 revenues, and the company expects data center revenues to grow approximately 60% in fiscal 2027. Marvell reported strong demand for 800G optical DSPs while its 1.6T products ramp rapidly, and scale-out switching is expected to more than double in fiscal 2027 on broader adoption of its 51.2T switch products. The company expects its custom business to accelerate in the second half of fiscal 2027 and more than double year over year in fiscal 2028, driven by XPU and XPU-attach solutions, with an expanded hyperscaler agreement covering AI inference accelerators, storage controllers, network interface controllers, memory interface controllers and near-memory compute. Marvell also expanded its position in next-generation AI infrastructure through its relationship with NVIDIA, including NVLink Fusion, scale-up switching and silicon photonics, and introduced products such as the 102.4 Tbps Teralynx T100 switch. Marvell shares have gained 170.3% year to date, and the Zacks Consensus Estimate for fiscal 2027 earnings suggests year-over-year growth of 48%.
CoreWeave Deploys Multi-Rack NVIDIA Vera Rubin NVL72 Clusters
CoreWeave is expanding its capabilities for next-generation AI workloads with the deployment of multi-rack NVIDIA Vera Rubin NVL72 clusters on CoreWeave Cloud, alongside two new capabilities for its AI Object Storage platform: cross-region write acceleration and a lower-cost Archive tier. The multi-rack Vera Rubin NVL72 deployment allows hundreds of NVIDIA Rubin GPUs to operate as a single scale-out cluster, with each NVL72 rack combining 72 Rubin GPUs with 36 Vera CPUs, NVIDIA NVLink 6, ConnectX-9 SuperNICs and BlueField-4 DPUs, connected across racks using NVIDIA Spectrum-X Ethernet networking and automated through CoreWeave's Mission Control platform. CoreWeave says its Local Object Transport Accelerator caches data locally and can reduce latency by up to 8x compared with traditional storage-cluster reads while delivering up to 7 GB/s of throughput per GPU, while the new cross-region write capability lets customers write data locally as CoreWeave replicates it to another region in the background. The company faces intensifying competition in the AI cloud market from Microsoft and Nebius Group N.V., which plans to invest £1.7 billion in U.K. AI infrastructure and expects connected power capacity to reach roughly 800 MW to 1 GW by 2026 end. CoreWeave shares have gained 24.4% year to date against the Internet Software industry's fall of 0.6%, and the Zacks Consensus Estimate for CRWV's earnings for the current year has been revised downward over the past 60 days.
HPE Expands Oracle AI Data Center Deal and Signs Tottenham Hotspur Project
Hewlett Packard Enterprise expanded its global AI infrastructure partnership with Oracle, bringing HPE Juniper Networking into Oracle AI data centers, and separately agreed to a large-scale digital modernization project with Tottenham Hotspur Football Club focused on stadium hybrid cloud and AI infrastructure. Both collaborations highlight new client deployments for HPE across AI data centers and digitally enabled sports venues. The Oracle expansion supports the view that Juniper networking widens HPE's role in AI-centric data centers, where Cisco and Arista are key rivals, and shows Juniper integration moving into multi-year deployments. The Tottenham project reinforces HPE's GreenLake and as-a-service infrastructure business by turning a complex, multi-site venue into a single hybrid cloud environment. The article does not answer how far HPE can shift its overall revenue mix away from legacy servers toward these recurring, software-rich contracts.
Cisco Launches Nvidia-Backed Splunk AI POD for Air-Gapped Environments
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.
Apple Weighs Enterprise AI Servers Using M-series Ultra Chips and Nvidia Networking
Apple is considering building enterprise servers powered by its M-series Ultra processors, according to The Information, potentially pairing those chips with networking equipment from Nvidia. The servers would reportedly be sold to businesses rather than used only inside Apple's own data centers, putting two very different chip strategies inside the same machine. Apple has spent years designing processors to reduce its dependence on outside suppliers, while Nvidia has become the backbone of much of the AI data-center market. Such a move would push Apple silicon beyond Macs, iPhones and its own computing ecosystem into the larger enterprise infrastructure market, where it would compete more directly with Dell, Hewlett Packard Enterprise and Supermicro. The project is still under consideration, so there is no guarantee Apple moves forward.
Broadcom CEO Hock Tan Rejects AI Slowdown Fears, Defends Long-Term Revenue Targets
Broadcom CEO Hock Tan pushed back on fears of a broader AI slowdown and defended the company's long-term revenue targets. The semiconductor and infrastructure software company has growing exposure to specialized AI chips and networking, selling networking technology that connects large clusters of AI accelerators and emerging as a key participant in custom chips built for hyperscale customers. That position gives Broadcom exposure to AI spending without full reliance on the market for general purpose GPUs, a distinction that may matter more as technology firms build more custom silicon for cheaper, more effective handling of massive AI workloads. Tan's optimism offers investors a direct rebuttal to recent worries that the enormous infrastructure cycle behind AI equities could be cooling. The next test will be Broadcom's results and outlook, which will show whether customer orders continue to support management's long-term optimism.
Broadcom, Micron and Marvell Raise AI Guidance as Demand Accelerates
Broadcom, Micron Technology and Marvell Technology all raised forward guidance in their latest earnings reports, citing accelerating AI infrastructure demand. Broadcom reported fiscal Q3 2026 revenue of $29.59 billion, up 85.5% year over year, with AI semiconductor revenue of $16.7 billion, up 221% year on year, and guided Q4 AI semiconductor revenue to $21.7 billion, up 236% year over year, outlining a trajectory reaching approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028. Micron posted fiscal Q3 2026 revenue of $41.46 billion, up 345.7% year over year, and guided fiscal Q4 revenue to $50.0 billion plus or minus $1.0 billion at gross margin near 86%, with full-year fiscal 2026 capital spending of approximately $27 billion. Marvell reported Q2 FY2027 revenue of $2.739 billion, up 36.5% year over year, and raised its fiscal 2027 data-center growth outlook to approximately 60% from approximately 50% previously, with CEO Matt Murphy flagging the October 6, 2026 Investor Day as the next catalyst. Micron's fiscal Q4 report, expected late this month, is the next test of whether hyperscaler capital spending holds through year-end.
Arista Networks Earns Zacks Rank #1 as AI Networking Demand Drives Upgraded Outlook
Arista Networks has been named a Zacks Rank #1 Strong Buy stock after posting a strong beat-and-raise quarter in early August, with its Q3 earnings estimate surging 19%, its FY26 EPS estimate up 11%, and its FY27 outlook 14% higher. The AI infrastructure company, which counts Microsoft and Meta among its largest clients, beat the Q2 earnings estimate by 15% on August 4 and reported its first $3 billion quarter, boosted by its Arista 2.0 platform strategy. Arista more than doubled its revenue between 2022 and 2025, from $4.38 billion to $9.00 billion, and more than doubled its GAAP earnings over the same period, from $1.07 a share to $2.75 per share. The company is projected to grow revenue another 39% in FY26 and 26% in 2027 to reach $15.80 billion, while adjusted EPS is expected to rise 36% in 2026 and 24% next year to $4.99 per share. Arista holds $13.3 billion in cash and equivalents against near-zero debt, and its average Zacks price target implies 30% upside from current levels.
Nokia Tied to Nscale's $3.5 Billion Pre-IPO AI Funding Round
Nokia Oyj is linked to Nscale's plan to raise about $3.5 billion in pre-IPO funding for AI infrastructure, a round expected to test Nokia's role as a supplier of AI infrastructure hardware and related services. Nokia is also a direct investor in Nscale, so the funding outcome could influence future AI infrastructure partnership terms. The planned raise effectively stress tests a key part of the Nokia narrative, which leans on AI and cloud orders in optical and IP networks as a catalyst for future earnings and margin expansion. The clearest marker to track is how management attributes any future AI-related optical and networking orders in its updates through 2027, and whether it explicitly links deal visibility or backlog to Nscale and similar AI infrastructure partners. Nokia sells mobile, fixed, and cloud network solutions across regions from North and Latin America to Asia and the Middle East, putting its AI infrastructure work with Nscale inside its broader communications hardware and services footprint.
Cisco Gains as Splunk Launches On-Premises AI POD Platform
Cisco Systems shares rose about 0.6% to $110.77 Tuesday morning after Splunk released version 1.0 of Cisco AI POD for Splunk, a platform that lets enterprises run Splunk's AI capabilities on Red Hat OpenShift inside their own infrastructure. The on-premises option gives regulated industries a way to deploy AI without moving sensitive workloads to the public cloud. Cisco's fiscal fourth-quarter results showed hyperscaler AI orders of $4 billion in the quarter and $9.3 billion for fiscal 2026, with AI-infrastructure revenue of roughly $4 billion for the full year. Management expects that revenue to reach $7.5 billion in fiscal 2027, an 87.5% year-over-year jump. At $110.765, Cisco trades 48.48% above the GuruFocus GF Value estimate of $74.60, leaving execution on recurring software revenue as the next test.
Bank of America Sees $3.2 Trillion Semiconductor Market by 2030
Bank of America estimates the semiconductor industry's total addressable market will reach $3.2 trillion by 2030, nearly doubling as demand spreads across memory, data centers and other key areas. The bank noted the industry took almost 50 years to reach $1 trillion in annual sales, with AI infrastructure now accelerating the next phase of growth. Data centers remain a central part of that picture, giving Nvidia exposure to one of the sector's biggest investment opportunities, though Bank of America sees the opportunity as potentially larger. The bank cited strong memory demand and a potential recovery in automotive and industrial semiconductors, with spending on servers, PCs, smartphones and semiconductor equipment all projected to climb through 2030. It named Nvidia and AMD as resilient compute names, Marvell in networking, and Analog Devices and onsemi among analog players. The $3.2 trillion projection casts the current AI boom in a new light for Nvidia investors, raising the question of whether AI infrastructure spending can sustain continuous revenue growth.
Celestica Names Todd Ankenmann CFO as Mandeep Chawla Moves to Group President Role
Celestica has reshuffled its leadership, with long-time finance chief Mandeep Chawla moving to a new Group President, Global Markets role and Todd Ankenmann stepping in as CFO. The shares fell 8.44% in the last session and are down 17.79% over 90 days, though they remain up 6.03% year to date with a 1 year total shareholder return of 28.25%. The most followed narrative on Simply Wall St pegs Celestica's fair value at around CA$677 per share against a last close of CA$439.70, a roughly 35% gap that is broadly in line with the CA$680 analyst consensus target. That view rests on accelerated demand for advanced networking and AI infrastructure from hyperscaler customers, driving growth in Celestica's CCS segment through multiple new 800G and upcoming 1.6T program ramps, with forecast revenue growth of 38.8% a year and an expected profit margin of 6.4%. The model assumes earnings could reach US$2.7b by around 2029 and applies a 7.89% discount rate, while the stock is described as trading 37.5% below the platform's DCF based future cash flow value of CA$702.97.
Ciena Launches $200 Million Venture Fund Targeting AI Networking
Ciena Corporation has launched Ciena Ventures, a new corporate venture capital program with an initial $200 million commitment to invest in early-stage companies and technology-focused venture funds. The program will focus on four areas: networking infrastructure and operations, next-generation data centers, optical networking and interconnects, and adjacent technologies such as computing, materials and emerging communications. Ciena management expects its addressable market to reach $50 billion by 2029, expanding from traditional WAN into data-center connectivity, while fiscal third-quarter backlog rose to $8.5 billion and revenue guidance was raised to $6.42 billion. Fiscal 2027 revenue is expected to grow at least 30% to $8.3-$8.4 billion, with adjusted operating margin of 25-27%. The article also notes competitive pressure from Cisco Systems, whose networking product orders rose 40% year over year in its fiscal fourth quarter, and from Arista Networks, which expects AI revenue to reach at least $3.6 billion in 2026.
Qualcomm Partners With Cornelis Networks on AI Data Center Compute Fabric
Qualcomm is collaborating with Cornelis Networks on new AI data center networking and programmable compute infrastructure. Cornelis Networks has introduced its Active Compute Fabric, an open architecture focused on scale-up and scale-out AI networking with embedded compute. The partnership extends Qualcomm Technologies' recent AI infrastructure work beyond its collaboration with Amazon into broader data center networking projects, though this Active Compute Fabric collaboration with Cornelis captures only one piece of what is shaping Qualcomm's wider AI infrastructure story. Qualcomm develops and licenses wireless technologies worldwide, and the move into AI-focused networking builds on its semiconductor expertise for large data center customers, giving the business another entry point into AI infrastructure alongside handset and other connectivity products. The tie-up reinforces the part of Qualcomm's narrative that leans on data center entry, accelerated by the Alphawave acquisition, to reach new AI inference and edge workloads, while also surfacing the open question of whether early-stage AI and data center pushes can justify heavier research and development spending without squeezing earnings amid competition from players like Nvidia and AMD.
Cornelis raises $205M to challenge Nvidia with open AI networking fabric
Cornelis, a company creating networking technology to help AI chips communicate more effectively, announced Monday that it has raised $205 million in a funding round led by IAG Capital Partners. The company also announced a product it calls Active Compute Fabric, a network technology that targets the fact that much GPU time is wasted waiting for data to arrive, by letting chips process and send information at the same time. Cornelis, which spun off from Intel in 2020, is competing with Nvidia by offering an open architecture, meaning customers can use a variety of GPU and accelerator hardware with Cornelis' networking fabric, whereas Nvidia chips are optimized to run on Nvidia's own software. Cornelis is part of a new wave of AI infrastructure companies emerging to break apart Nvidia's market dominance, piece by piece. Cornelis has already started shipping its product and is working on a new generation of it, expected to be released later this year.
Verizon Adds Nine Members to 6G Innovation Forum, Reports ISAC and AI Trials
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.
NVIDIA and Palantir Raise Guidance as AI Spending Accelerates
NVIDIA and Palantir both raised guidance after posting quarters that doubled revenue, with NVIDIA growing 105.8% year over year to $96.22 billion and Palantir's U.S. commercial segment surging 149% to $764 million. NVIDIA's Data Center revenue reached $89.023 billion, up 117%, while networking jumped 138%, and the company guided Q3 revenue to $108 billion, plus or minus 2%, saying supply sets the ceiling. Palantir's total revenue reached $1.94 billion, up 92.8%, with adjusted EPS of $0.41 beating the $0.28 estimate, total contract value closed of $3.37 billion, and net dollar retention of 157%. NVIDIA trades at a forward P/E of 24 on $302.97 billion in trailing revenue against 70% guided fiscal 2028 growth, while Palantir trades at a forward P/E of 75 and a price-to-sales ratio of 65. NVIDIA's 17.32% YTD move lags its fundamentals, and Palantir's negative 5.92% YTD reset will look like a gift if AIP pilot conversions hold pace, though its $265 million in Q2 stock-based compensation and long sales cycles keep the risk in view.
Arista Issues Critical EOS and VeloCloud Security Advisories
Arista Networks released a batch of security advisories on September 9, turning an advance warning into an immediate customer maintenance task, with critical vulnerabilities affecting EOS and VeloCloud. Arista's updated summary lists critical EOS gNPSI and P4Runtime vulnerabilities with CVSS v3.1 scores of 10, alongside other findings, and customers must assess the conditions and remediation for their own environments. Cisco Systems' September 4 security commentary describes the broader problem, saying vulnerability discovery is accelerating beyond customers' ability to remediate it, and its September 2 advisories already include critical issues involving IOS XR and Nexus 9000 switches using Silicon One, with customers directed to fixed software. Cisco says it scanned 1.8 billion lines of code across 25 languages in eight weeks using frontier models, while Arista's May statement said AI-assisted testing caught complex flaws before software release. For both Cisco Systems and Arista Networks, the investment question is whether suppliers can keep expanding AI networks without letting the cost and disruption of securing them erode customer confidence, since finding defects creates engineering and service obligations before it creates incremental revenue.
Hewlett Packard Enterprise Shares Up Over 120% as AI Orders Reach $2.4 Billion
Hewlett Packard Enterprise Company shares have climbed more than 120% over the past year, with the stock rallying after its September 2nd earnings report. The enterprise computing infrastructure provider posted revenue growth of 16.2% and networking revenue growth of 75%, while non-GAAP gross margin expanded to 16.2% from 8.5%. The company also raised its fiscal year 2026 revenue growth guidance to a range of 34% to 37% and reported $2.4 billion of AI orders in Q3, up from 1.8 billion in Q2. Despite the top-line strength, profitability remains a concern, as the Networking operating profit margin for the nine months ending came in at 22.4%, down from 25.1% in the prior period, and management noted that orders grew 3x to 5x times faster than revenue, which could delay recognition. Hedge fund interest rose as well, with 85 funds holding a stake in Q2 versus 58 in Q1, including a new $120 million position from Point72 Asset Management.
Ciena Targets at Least 30% Fiscal 2027 Revenue Growth as Premium Valuation Draws Scrutiny
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 Beats on Q4 Earnings, Guides Fiscal 2027 Revenue to $72.2-$73.4 Billion
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).
Cisco Slips as Huawei Trade-Secret Trial Opens in Brooklyn
Cisco Systems shares slipped approximately 0.5% to $108.865 Thursday as Huawei's federal criminal trial opened in Brooklyn, where prosecutors accused the Chinese technology company of conspiring to steal trade secrets from five U.S. businesses, including source code for Cisco's router operating system. Federal prosecutors also alleged sanctions and financial-system violations tied to Iran, while Huawei rejected the charges and described the disputed activity as legitimate business conduct or isolated employee behavior. The trial could run for roughly three months, and Cisco is not prosecuting the case, leaving investors with no disclosed financial recovery to price into the shares. Separately, Cisco booked $9.3 billion of fiscal 2026 AI orders, equal to about 14.7% of its $63.33 billion in annual revenue, and expects AI revenue to climb from approximately $4 billion to $7.5 billion in fiscal 2027. Cisco trades 46.56% above its $74.28 GF Value estimate.
Nvidia Partners With Eight Australian Firms for 2GW AI Buildout
Nvidia announced on Thursday that it is partnering with eight Australian data center and cloud companies to expand AI computing capacity in the country, targeting a buildout of up to 2 gigawatts by 2027. Australia's existing computing capacity is 1.6 GW, per Reuters, which cited figures from analysts DC Byte, putting the planned expansion on track to more than double the nation's current load. The eight partners are Firmus, Sharon AI, IREN, Megaport, ResetData, CDC, NEXTDC, and AirTrunk, and they will operate what Nvidia calls AI factories, deployments anchored to its DSX platform that integrate physical infrastructure, compute, networking, software, and reference designs. Nvidia said it will supply the DSX platform, accelerated computing, networking, software, and ecosystem support, and that expanded access to its accelerated computing and Nemotron open models will let organizations including healthcare startup Heidi and software company Atlassian build AI models, applications, and agents for local industries. The partners are at varying stages of buildout: IREN is applying the DSX architecture to its 800-megawatt Bundey campus in South Australia, CDC said its existing footprint across Australia and New Zealand exceeds 550 megawatts with an additional 800 megawatts under development, Sharon AI is deploying up to 68,000 Nvidia GPUs connected with Nvidia Quantum InfiniBand and Spectrum-X Ethernet networking, and Megaport is expanding access to Nvidia accelerated computing through its wholly owned subsidiary, Latitude.sh. Nvidia and two of the partners named in Thursday's announcement, Sharon AI and Firmus, have a prior relationship, having initially been named partners in Nvidia's AI Compute Partnership, a financing program under which Nvidia provided credit backing to cloud providers in return for a share of their revenue; Nvidia stepped away from that program last week after employees raised concerns about antitrust exposure, though the company left open the possibility of restructuring the initiative. Nvidia's AI-related equity holdings reached $99 billion as of late July, up from approximately $7 billion a year earlier.
Palantir and NVIDIA Launch Sovereign AI Stack for Supply Chains
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.
Marvell Technology Shares Rise 4.3% on AI Data Center Portfolio Preview
Marvell Technology shares jumped 4.3% in the afternoon session after the networking chips designer announced plans to showcase its end-to-end AI data center connectivity and memory solutions portfolio at the upcoming AI Infra Summit 2026 in Santa Clara, California. According to a company press release, the presentation will highlight next-generation switching technology, advanced telemetry capabilities, optical interconnects, and CXL-based memory solutions, which Marvell says aim to optimize system utilization, token efficiency, bandwidth, and overall return on investment for artificial intelligence infrastructure. After the initial pop, the shares cooled down to $234.45, up 4.1% from the previous close. Marvell Technology is up 162% since the beginning of the year, but at $234.45 per share it is still trading 25.9% below its 52-week high of $316.43 from June 2026.
Arista's $9.7 Billion AI Commitments Signal Long Revenue Wait
Arista Networks revealed that its multiyear purchase commitments have nearly tripled to $9.7 billion, but investors should not mistake these for booked sales, as deployments can take 18 to 24 months. The company's second-quarter results delivered its first $3 billion quarter, with revenue surging 37.7% to $3.04 billion and adjusted operating margin hitting 49.9%. Management expects roughly $3.3 billion of third-quarter revenue, while new 1.6-terabit platforms position Arista to move more data across AI clusters. At $195.03, the stock trades 19.36% above its $163.39 GF Value, suggesting that much AI-networking optimism is already priced in.
Cisco Says AI Agents Consume 60% of Global Inference
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.
HPE Reports $12.2B Revenue, Raises Free Cash Flow Outlook
Hewlett Packard Enterprise reported fiscal third-quarter revenue of $12.2 billion, up 34% year over year, with company-defined non-GAAP free cash flow rising to $958 million from $790 million. The company's balance sheet expanded as inventory reached $11.823 billion, up from $6.352 billion at fiscal year-end, while accounts payable grew to $13.734 billion from $7.731 billion. Networking revenue, which includes a full quarter of Juniper Networks, reached $2.9 billion, up 74.9% year over year, with a segment operating margin of 22.0%, flat versus 22.1% a year earlier. Cumulative Networks for AI orders hit $2.2 billion, and the company raised its fiscal year-end objective to $2.5 billion to $3.0 billion. HPE now expects at least $3.75 billion of fiscal 2026 free cash flow and at least $5.0 billion in fiscal 2027, with Juniper integration targeting $600 million in annualized cost synergies by fiscal 2028.
Campus Switch Market Grows as Prices Skyrocket in 2Q 2026
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.
Broadcom Inc. reported Q3 2026 revenue of $29.6 billion, up 86% year-over-year, with AI semiconductor revenue soaring 221% to $16.7 billion, and the company expects AI semiconductor revenue to reach $21.7 billion in Q4 2026, a 236% increase. Total Q4 revenue is projected at approximately $34.8 billion, up 93%. The company generated $13.7 billion in free cash flow in Q3, representing 46% of revenue, providing ample financial flexibility. Management anticipates AI semiconductor revenue of about $115 billion in FY 2027 and $230 billion in FY 2028, indicating a multiyear growth cycle. William Blair analyst Sebastien Naji reiterated a Buy rating, citing Broadcom's durable edge in custom AI silicon and networking, supported by a robust XPU customer roadmap. Risks include higher expectations, competition from Marvell, Nvidia, AMD, and hyperscalers' internal chips, as well as potential AI spending slowdowns.
Marvell Technology Inc. reported record second-quarter revenue of $2.74 billion, up 37% year over year, driven by a 46% surge in data-center sales to $2.17 billion, which now account for about 80% of total revenue. Management forecasts third-quarter revenue of approximately $3.15 billion as demand for custom AI chips, optical products, and networking equipment continues to grow. The company is positioning for the industry shift from copper to optical interconnects, having acquired Celestial AI to gain its Photonic Fabric technology. Marvell expects its photonics business to reach a $500 million annualized revenue run rate by the end of fiscal 2028 and $1 billion the following year. The next catalyst is its investor day on October 6.
Oracle to Deploy HPE Juniper Gear in AI Data Centers
Hewlett Packard Enterprise announced on September 2 that Oracle may deploy its Juniper networking equipment across Oracle Cloud Infrastructure data centers under a multi-year collaboration, with potential use of PTX and MX routing plus QFX and EX switching, along with support and financing. HPE also issued warrants to Oracle, making the arrangement strategically important without guaranteeing revenue. The bull case is that AI clusters are becoming networking systems, and Juniper gives HPE credible assets while Oracle provides a demanding reference customer. However, the bear case is conversion: the release discloses no guaranteed purchase volume or revenue, and warrants could dilute existing owners. Oracle gains supply-chain flexibility but carries a heavier capital burden. As of August 14, 59.57 million HPE shares were sold short, about 4.5% of float, indicating skepticism. Investors should wait for firm orders and margins before treating this as a financial inflection.
ALAB01 Surges 5% on AI Momentum, Broker Sets Target at 6.01 Baht
ALAB01, a foreign securities derivative instrument of Astera Labs, rose 5.34% to 4.34 baht, driven by investment momentum in AI infrastructure that supports the underlying stock price. Asia Plus Securities research noted that the Scorpio AI Fabric Switch product is likely to become the highest revenue generator one quarter ahead of schedule, supporting Q3 revenue guidance of $540-560 million, or growth of 38-43% quarter-on-quarter. The reference target price for ALAB01 is 6.012 baht, based on an exchange rate of 32.88 baht per dollar and a conversion ratio of 1:2,300. The research house recommends accumulating on weakness, as the current price already reflects high growth expectations.
Broadcom shares fell 5.8% in morning trading after the company reported second-quarter 2026 results that beat earnings but issued a softer-than-expected sales outlook for the next quarter. Revenue came in at $29.59 billion, up 85.5% year over year, with non-GAAP operating income of $20.1 billion and non-GAAP diluted EPS of $3.32. The company guided third-quarter revenue to approximately $34.8 billion, slightly below analysts' consensus of $35.2 billion. CEO Hock Tan highlighted strong demand for custom AI accelerators and networking, noting Q3 AI semiconductor revenue of $16.7 billion, up 221% year over year. The stock pared losses to $352.18, down 4.2% from the previous close.
Dell, GitLab Surge on Earnings; MongoDB, Credo Fall
Stock futures were mixed early Wednesday as investors awaited key economic data and the Federal Reserve's Beige Book, with sentiment constrained by U.S.-Iran strikes and rising global bond yields. Among the biggest movers, GitLab jumped 22% after topping Q2 expectations with revenue up 21% to $286.3M and issuing upbeat guidance, while Dell Technologies surged 10% on strong FQ2 results, including revenue up 58% to $46.97B and adjusted EPS of $7.04. Dell also raised FY2027 revenue guidance by $25B to $192B, well above the $173.3B consensus, driven by an increased AI-optimized server revenue outlook to $74B from $60B, with AI server orders reaching a record $60.9B and a $95B backlog. On the downside, MongoDB fell 15% despite beating estimates with 30% revenue growth and raising its full-year outlook, as higher operating expenses overshadowed results, while Credo Technology dropped 7% despite revenue more than doubling to $479M, due to margin pressure and rising costs.
Credo Technology Beats Q1 Earnings and Revenue Estimates
Credo Technology Group Holding Ltd. reported quarterly earnings of $1.2 per share, beating the Zacks Consensus Estimate of $1.17 per share, and surpassing revenue estimates with $479 million in revenue for the quarter ended July 2026, up from $223.07 million a year ago. This marks the fourth consecutive quarter of earnings and revenue beats. The company's shares have gained about 57.2% year-to-date, outperforming the S&P 500's 12.3% gain. Looking ahead, the consensus EPS estimate for the coming quarter is $1.25 on $502.69 million in revenue, and for the current fiscal year, $6.02 on $2.35 billion in revenue. Credo Technology currently holds a Zacks Rank #2 (Buy), indicating expectations of outperformance in the near term.