Cisco earnings are out Wednesday. Here's what top analysts expect to see

Cisco Systems is anticipated to report strong fiscal Q4 2025 earnings, with LSEG analysts projecting 98 cents EPS on $14.6 billion revenue, reflecting 12.1% and 7.1% year-over-year growth respectively, largely driven by robust AI infrastructure orders and cybersecurity demand that have propelled the stock over 20% year-to-date. While current performance is robust, investor focus will shift to the company's fiscal 2026 outlook, as analysts weigh potential conservative guidance amid macroeconomic uncertainty, the need for clearer AI revenue disclosure versus orders, and the sustainability of valuation expansion despite a strong AI backlog and ongoing campus refresh cycle.

Analysis

Cisco Systems heads into its fiscal fourth-quarter earnings report with high expectations, underpinned by a consensus forecast for double-digit earnings growth of 12.1% and revenue growth of 7.1% year-over-year. The company's stock has surged over 20% year-to-date, fueled by a strong narrative around artificial intelligence and cybersecurity, validated by the firm securing over $1 billion in AI infrastructure orders, which surpassed its full-year target. Despite expectations for a strong quarterly print, with some analysts like Morgan Stanley and Wells Fargo anticipating an earnings beat, the market's focus has pivoted to the sustainability of this momentum. The primary investor concern is the fiscal 2026 outlook, which analysts from Morgan Stanley and Citi believe could be conservative due to macroeconomic uncertainties. Furthermore, Cisco's valuation has significantly re-rated, with its P/E multiple expanding to approximately 18x from a five-year average of 14x, according to Evercore ISI. This elevated valuation puts pressure on the company to translate its impressive AI order book into disclosed revenue figures, a key proof point that analysts note is currently missing and is crucial for justifying its status as an 'AI winner' against competitors like Broadcom. While the most bullish outlooks, such as Wells Fargo's, see further upside from monetizing the AI backlog and new Sovereign AI opportunities, the prevailing sentiment is one of caution, weighing the accomplished cyclical recovery against potentially elevated expectations for the campus refresh cycle and the need for more tangible AI financial disclosures.

Key Decisions for Investors

• Investors should prioritize Cisco's fiscal 2026 guidance over the Q4 results, as a conservative forecast, which is widely anticipated, could limit further stock appreciation despite a potential earnings beat.
• Given the stock's valuation has expanded to an 18x P/E multiple, continued conviction hinges on management providing concrete AI revenue figures or a clear timeline for backlog monetization, as AI orders alone may no longer be sufficient to drive the shares higher.
• Monitor management's commentary on the pace of the campus upgrade cycle and enterprise spending trends, as any softness could indicate that core business strength is lagging the AI-driven narrative.
• Considering the stock's 20% year-to-date run-up and the cautious tone from several analysts, it may be prudent to protect gains while watching for a potential entry point post-earnings if a conservative outlook causes a temporary pullback.