The One Number Cisco Stock Investors Should Watch

You probably think of Cisco Systems (CSCO) as an AI stock, a supplier of AI infrastructure to the hyperscalers. That business was only about 6% of Cisco’s revenue in fiscal 2026. The rest includes networking and security products sold to enterprises and telcos. Cisco stock returned 61% over the past year. With AI that small a share of revenue, you are paying for growth across the whole company. How fast is Cisco’s business outside AI set to grow?

Cisco Expects About 10% Growth Outside AI

Cisco’s business outside AI is on course to grow about 10% in fiscal 2027. Management gave that figure on the August call for fiscal Q4 2026, setting AI apart from the rest of the full-year forecast. Management called that pace significantly faster than the growth it laid out at a past investor day.

Cisco’s orders were strong as well. Product orders, AI included, rose 35% from a year earlier in fiscal Q4 2026. Orders grew in all three of Cisco’s regions. Within those orders, Wi-Fi 7 made up more than half of Cisco’s wireless orders in the quarter.

Cisco stock trades at 31.8 times its earnings over the past year, against 21.9 for the S&P 500. That multiple is the price you pay for each dollar of annual profit. That premium leaves little room for the faster pace outside AI to fade.

Is Cisco’s Growth Already Peaking?

Cisco’s management did not think so in August, though the stock has lost ground. Cisco stock fell 8.6% over the past three months, while the S&P 500 rose 2.6%. In late September, the broker Piper Sandler lowered its price target on Cisco to $125 from $132, still about 17% above the $106.94 share price. The broker cited concerns that growth is peaking across the industry.

Cisco expects fiscal 2027 revenue of $72.2 billion to $73.4 billion. Management projects $7.5 billion of that from AI infrastructure. The rest of Cisco would then bring in about $65 billion. That alone is more than Cisco’s total revenue of $63.3 billion in fiscal 2026.

Not all of Cisco’s recent growth came from selling more gear. Management said price increases added about 5 points to revenue growth in fiscal Q4 2026. Cisco raised prices on hardware that uses a lot of memory, where its costs had risen. In fiscal 2027, Cisco has to grow on top of those higher prices and a strong fiscal 2026.

What Could Go Wrong For Cisco Stock?

Management warned on the August call that comparisons get much tougher in the second half of fiscal 2027. Cisco’s revenue grew 12% and 18% from a year earlier in the last two quarters of fiscal 2026. Those quarters are the base the second half of fiscal 2027 is measured against.

One measure of profit is under pressure too. Management expects gross margin, the share of revenue left after the cost of goods, to slip slightly through fiscal 2027. The reason is that Cisco is shipping much more hardware.

Cisco stock has also fallen harder than the market before. In the 2022 inflation shock, Cisco stock fell 36% from peak to trough. The S&P 500 fell 24% in the same period.

The fiscal Q1 2027 report comes next. Cisco expects revenue of $18 billion to $18.2 billion for that quarter.

For Cisco stock investors, the number to watch is growth outside AI. Near 10%, the stock’s premium over the S&P 500 is easier to understand. Cisco does not guide that figure by quarter, so the first test is total revenue: a fiscal Q1 2027 result below the $18 billion to $18.2 billion guide would be an early warning for the full-year outlook.

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