Cisco’s CEO says it expects to see $3B in AI hyperscaler infrastructure revenue in 2026

Scale up, across DCI opportunities

Within the hyperscaler industry, Cisco sees an opportunity to strengthen its position in the scale-up and scale-across segments for Data Center Interconnection (DCI) with its pluggable optics products and latest terabit router line.  

Scaling up data in centers involves increasing the capacity or performance of a single server or system by adding more resources to it, such as upgrading components within a single physical or virtual server, such as adding more powerful CPUs or processor cores and increasing memory (RAM).

Scale across has become a new networking paradigm in AI, extending high-performance computing beyond a single data center to connect multiple, geographically distributed facilities into a single, unified "AI factory."

Cisco is finding that as its hyperscale customers look to extend AI clusters across their infrastructure to accommodate scale-up and scale-across, it is seeing growing demand for Acacia's coherent pluggable optics, which offer cost and power savings. 

“We are now selling our pluggable optics to all the major hyperscalers,” Robbins said.

Although he did not call out any specific customers, Robbins noted that “we had 4 of the major hyperscalers who grew triple digits during the quarter, and we had four meaningful use case wins during the quarter.”

Likewise, Cisco is gaining momentum with its terabit networking gear, centered on the Silicon One P200 chip, which delivers 51.2 Tbps of throughput for demanding AI/ML data center networks, enabling "scale-across" architectures that connect distributed AI clusters. The flagship product is the Cisco 8223 router, a compact (3RU) system with 64x800G ports, designed to power the backbone for large-scale AI training. 

“This 51.2 terabits per second fixed Ethernet routing system is designed for the intense AI workload traffic between data centers,” Robbins said. “With Silicon One's unmatched scalability, power efficiency and programmability, we can provide the performance and speed across data centers that would have previously only been possible within a data center with a switching infrastructure.”

And while Silicon One continues to grow, with Cisco expecting to ship its one millionth chip in the second quarter of fiscal year 2026, product orders for AI use cases beyond hyperscaler training are also gaining traction with orders for data center systems, including switching and compute, growing double digits in the first quarter as customers prepare their networks for inferencing and agentic workflows.

“We see a growing pipeline in excess of $2 billion for our high-performance networking products across sovereign, neo-cloud and enterprise customers,” Robbins said. “To capture this opportunity, we continue to make progress both within our own portfolio and across our strategic partnerships.”

Networking leads revenue mix

Driven by gains in its networking segment, Cisco’s total revenue was $14.9 billion, up 8% year-over-year.

“In the first quarter, total revenue increased 8% year-over-year with product revenue up 10%, driven by robust demand for our AI infrastructure and campus networking solutions,” said Mark Patterson, CFO of Cisco.

Led by high double-digit growth in service provider routing, primarily driven by revenue from AI infrastructure, Cisco noted networking was a standout, with 15% growth across the portfolio. Service provider and cloud product orders remained strong, rising 45% year over year, driven by double-digit growth from hyperscalers. Demand from telco customers was also strong in the first quarter, with orders up more than 25% year over year.

Cisco’s total product revenue was $11.1 billion, up 10%, and service revenue was $3.8 billion, up 2% year-over-year.

Data Center switching and enterprise routing also contributed to double-digit growth, while campus switching had growth in the high single digits.

However, security declined 2%. Patterson said the decline in security “reflects declines in prior generation products and a shift to cloud subscriptions in our Splunk business, partially offset by growth in Secure Firewall, Duo, and SASE.

Likewise, Collaboration was down 3%, reflecting declines in devices and WebEx and observability was up 6%, primarily driven by growth in ThousandEyes.

Looking ahead to its fiscal second quarter, Cisco has forecast revenue of $15 billion to $15.2 billion. For fiscal year 2026, Cisco expects revenue to be between $60.2 billion and $61 billion.

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