Cisco CEO Says AI Demand Is Driving a Networking Supercycle
Cisco Systems CEO Chuck Robbins said growing demand for artificial intelligence infrastructure is pushing the technology industry toward what he described as a “networking supercycle.”
Speaking to CNBC on Thursday, Robbins highlighted the rapid acceleration in AI-related spending as companies race to expand their computing, networking, and data infrastructure capabilities.
Cisco Stock Surges After Strong AI Forecast Upgrade
Cisco shares jumped more than 15% following the company’s latest earnings update, putting the stock on track for its best trading day in more than 20 years.
The rally came after Cisco significantly exceeded expectations for AI infrastructure and hyperscaler-related orders during the fiscal year.
The company raised its AI-related revenue forecast to $9 billion, sharply higher than its previous guidance of $5 billion.
The strong outlook reinforced investor optimism that Cisco is becoming one of the major beneficiaries of the global AI investment boom.
Cisco to Cut Nearly 4,000 Jobs Amid AI Shift
Despite the strong financial outlook, Cisco announced plans to reduce its workforce by approximately 5%, affecting fewer than 4,000 employees.
The restructuring is expected to generate charges of roughly $1 billion as the company reallocates resources toward AI-focused business segments, silicon technologies, and optical networking products.
Robbins explained that the company needs to move quickly to adapt to the rapidly evolving AI market.
“Given the speed at which the market is moving, we need to make a rapid reallocation of resources,” Robbins said during the interview.
He also noted that many employees impacted by the layoffs could potentially transition into new AI-related positions within the industry.
Restructuring Costs to Extend Into Fiscal 2027
Cisco expects to recognize approximately $450 million in restructuring charges during the fourth quarter of fiscal 2026.
The remaining costs are expected to be recorded throughout fiscal 2027. According to the company, most of the restructuring charges will be cash-based.
The move reflects a broader trend across the technology sector, where companies are aggressively redirecting investment toward artificial intelligence infrastructure and services.
AI Market Growth Creates Uncertainty and Opportunity
Robbins acknowledged that the rapidly changing nature of the AI industry makes future demand projections difficult.
He said Cisco does not yet have full visibility into long-term customer spending plans, particularly among hyperscalers, although the company remains confident about its strategic positioning.
“We don’t have complete visibility yet, but we understand our customer relationships, design wins, and capital commitments well enough to feel optimistic about where we are headed,” Robbins explained.
The CEO also revealed that Cisco has intentionally stepped away from certain hyperscaler projects as it prioritizes opportunities with stronger long-term potential.
Cisco Discussing Mythos AI Model With Customers
Robbins also addressed growing industry attention surrounding the Mythos AI model, which has recently become a topic of discussion at White House meetings involving major technology executives.
According to Robbins, Cisco is now actively discussing the model with all of its customers.
Cisco is also participating in Anthropic’s Project Glasswing initiative, which recently granted select businesses access to test the AI model and evaluate its cybersecurity implications.
Cisco Focuses on Agility in the AI Era
Robbins emphasized that flexibility and speed will be essential for technology companies navigating the AI transformation.
“You have to be agile, and you have to be ready to move,” he said.
As demand for AI infrastructure continues accelerating, Cisco appears increasingly focused on positioning itself at the center of the next major technology investment cycle.
