Cisco CEO Chuck Robbins told CNBC on Thursday that skyrocketing demand for artificial intelligence tools and equipment is powering the industry toward a “networking supercycle.”

Shares jumped 13% and headed for their best day since 2011 after Cisco blew past its AI infrastructure and hyperscaler guidance orders for the fiscal year and lifted its forecast from $5 billion to $9 billion.

The California-based networking equipment maker also said it will cut about 5% of its workforce as it shifts focus toward AI-focused segments, silicon, and optics.

“Given the speed at which the market is moving, we need to make a rapid reallocation of resources,” Robbins told CNBC. “By the way, a lot of the people that are potentially impacted will actually go take those jobs.”

Cisco has lagged its hyperscaler peers in the AI race being led by Nvidia. But the company recently surpassed its internet boom highs as investors bet on its networking infrastructure needed to run data centers, and the AI trade broadens.

Robbins said the “dynamic” nature of the AI market makes it difficult to lock in forward bookings projections and that the company has opted out of some projects with hyperscalers.

“We don’t have visibility completely yet, but we have enough understanding of our relationship and the design wins and what their capital commitments are that we feel good about where we’re headed,” he said.

Robbins also commented on the Mythos hysteria that’s swept up financial markets and led to White House meetings with top tech leaders. He said the company is now discussing the AI model with every customer.

Cisco is a part of Anthropic‘s Project Glasswing, which gave access to a select group of businesses last month to test the model and its cybersecurity implications.

Worries about the potential risks and vulnerabilities exploited by the model has forced businesses to speed up security upgrades.

“You have to be agile, and you have to be ready to move,” Robbins said.

— CNBC’s Jordan Novet contributed reporting

Cisco shares soared 15% in extended trading on Wednesday after the networking company issued results and guidance that topped Wall Street’s projections.

The company said it’s cutting its workforce this quarter by fewer than 4,000 jobs, representing less than 5% of total employees.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: $1.06 adjusted vs. $1.04 expected
• Revenue: $15.84 billion vs. $15.56 billion expected

Revenue increased 12% in the quarter ended April 25, from $14.15 billion a year earlier, Cisco said in a statement. Net income rose to $3.37 billion, or 85 cents per share, from $2.49 billion, or 62 cents per share, a year earlier.

For the fiscal fourth quarter, Cisco called for $1.16 to $1.18 in adjusted earnings per share on $16.7 billion to $16.9 billion in revenue. Analysts polled by LSEG were looking for $1.07 in adjusted earnings per share on $15.82 billion in revenue.

Cisco said it’s received $5.3 billion in artificial intelligence infrastructure and hyperscaler orders so far this year, and raised its expected orders for the fiscal year to $9 billion, up from $5 billion. The company said it expects revenue in that market for the fiscal year of $4 billion, up from a prior projection of $3 billion.

While Cisco has trailed many of its data center peers in the AI race, Wall Street has been rallying to the company’s story of late, pushing the stock to a record late last year, finally surpassing its dot-com high. The shares have continued to climb this year, gaining 33%, topping the Nasdaq’s 14% advance.

Should the stock maintain its after-hours gains through Thursday, it would mark the sharpest rally since 2011.

CEO Chuck Robbins wrote in a blog post on Wednesday that the latest round of job cuts will begin on May 14. Cisco is the latest company to announce headcount reductions tied to AI.

“The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest,” Robbins said. “I’m confident Cisco will be one of those winners. This means making hard decisions – about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.”

Cisco said in a filing that severance and other costs will result in pre-tax charges of $1 billion, and that the company will recognize about $450 million of that in the fiscal fourth quarter.

During the third quarter, Cisco announced switches and routers that use its next-generation processor. The company also debuted a leaderboard for ranking generative AI models based on how their robustness against cybersecurity attacks.

Cisco’s networking revenue increased 25% to $8.82 billion, exceeding the $8.47 billion consensus among analysts polled by StreetAccount. Security revenue was flat at about…

Cisco reported better-than-expected quarterly results on Wednesday, but the stock dropped about 7% in extended trading as earnings guidance for the current period only met estimates.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: $1.04 adjusted vs. $1.02 expected
• Revenue: $15.35 billion vs. $15.12 billion expected

Cisco’s revenue grew about 10% from $14 billion a year earlier, according to a statement. Net income increased to $3.18 billion, or 80 cents per share, from $2.43 billion, or 61 cents per share, in the same quarter a year ago. The adjusted figure excludes stock-based compensation costs.

For the current period, Cisco expects $1.02 to $1.04 in adjusted earnings per share and $15.4 billion to $15.6 billion in revenue. Analysts polled by LSEG were looking for $1.03 per share and $15.18 billion in revenue.

Investors have been looking for Cisco to play a more central role in the artificial intelligence boom, which has lifted chipmakers and providers of other data center technologies. Cisco is seeing some growth acceleration, reporting $2.1 billion in AI infrastructure orders from hyperscalers during the quarter.

Cisco’s core networking revenue increased 21% from a year earlier to $8.3 billion. Analysts polled by StreetAccount were looking for $7.9 billion.

During the quarter, Cisco said it would provide products for an AI infrastructure project in Saudi Arabia alongside Advanced Micro Devices. Cisco also announced the launch of a networking switch that contains an Nvidia chip.

“On the sovereign side, there’s really no real need nor expectation for meaningful impact in FY26,” Cisco CEO Chuck Robbins said on a conference call with analysts. “And so we don’t need that to actually accelerate for the guide that we’ve, that we’ve provided. It’s purely upside.”

The ramping up of revenue from neoclouds, which are cloud providers that are younger than mature entities such as Amazon and Microsoft, should start in the second half of the current fiscal year and become more pronounced in the 2027 fiscal year, Robbins said.

The rising price of memory because of sharp demand for Nvidia graphics processing units has been affecting a variety of equipment companies. Cisco has announced price hikes and is adjusting contracts with channel partners, Robbins said.

“Do I think customers will try to buy ahead in some cases? Perhaps,” he said. “But I don’t think it’s going to be a big trend in the networking side of our business.”

For the 2026 fiscal year, Cisco is targeting $4.13 to $4.17 in adjusted earnings per share and $61.2 billion to $61.7 billion in revenue, which implies 8.5% growth. The LSEG consensus showed earnings of $4.12 per share, with $60.74 billion in revenue.

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