Cisco powers higher as AI potential offsets muted 2024 revenue outlook

Cisco Systems  (CSCO) - Get Free Report shares moved higher in pre-market trading after the network equipment chipmaker posted better-than-expected fourth quarter earnings and touted its potential in leveraging AI technologies. 

Cisco's muted sales forecast, which sees revenues in the region of $57 billion to $58.2 billion over the coming fiscal year, clouded a solid earnings report after the close of trading Wednesday, which saw the group post a stronger-than-expected bottom line of $1.14 per share. 

Orders were down 14% from last year, but improved 30% from the third quarter thanks in part to a $500 million boost from ethernet based AI networking demand. 

However, with CEO Chuck Robbins underscoring both recent market share wins in key product areas, as well as impact investment spending on AI technologies will support near-term growth, investors began to bid up Cisco shares in the after-hours session.

"The acceleration of AI will fundamentally change our world and create new growth drivers for us,' Robbins told investors on a conference call late Wednesday. "While AI has been an important element in our products for several years, this quarter, we announced new market-leading AI technologies across our collaboration and security portfolios designed to boost productivity, enhance policy management, and simplify tasks.'

"This is a huge opportunity for Cisco, and we are laser-focused on leading and winning in this space," he added. As a result of our innovation in this area, we expect Ethernet will lead in connecting AI workloads over the next five years."

Cisco Systems shares were marked 2.9% higher in pre-market trading to indicate an opening bell price of $54.49 each.

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