Cisco financials catch AI demand, enterprise networking growth

Cisco executives were upbeat about the growth in AI orders — $700 million so far this year, on way to surpass $1 billion in 2025 – as the networking giant detailed a successful 2Q earnings period this week to Wall Street.

“Our AI infrastructure orders with webscalers in Q2 surpassed $350 million, bringing our year-to-date total to approximately $700 million, and we are on track to exceed $1 billion of AI infrastructure orders in fiscal year ’25,” Cisco CEO Chuck Robbins said during the vendor’s financial call.  “I would say what we’re seeing on the enterprise side relative to AI is, it’s still in the very early days, and they all realize they need to figure out exactly what their use cases are, [but] we’re starting to see some spending though on specific AI-driven infrastructure.”

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“We do think there is an acceleration of companies that are just trying to get prepared for what they’re going to need,” Robbins said.  “It’s clear that agentic AI work streams are going to put more capacity onto the network.”

Robbins pointed to recent Cisco product additions leading the first wave of AI networking and security products that will drive future demand.  Those products include most recently the Cisco 9300 Smart Switch family aimed at data center customers to facilitate secure AI development across the enterprise. Other AI products include AI Defense, a service that promises to protect enterprise AI development projects; AI Pods which offer a UCS rack server built on the Nvidia HGX platform and introduced plug-and-play infrastructure stacks tailored for specific AI use cases; Hypershield, an AI-based  self-upgrading security fabric that’s designed to protect distributed applications, devices and data; and  the Cisco Nexus HyperFabric AI cluster.

Robbins said Cisco’s AI products are part of a three-pronged strategy to address the AI opportunity.

“First, AI training infrastructure for webscale customers. Combinations of our Cisco 8K, Silicon One, optics and optical systems are being deployed by five of the largest webscalers in their back-end training networks,” Robbins said.

Second, AI inference and enterprise clouds. “Our Nexus switches, Nvidia-based AI servers, AI Pods, and Hyperfabric and AI Defense software are designed to simplify and de-risk AI infrastructure deployment and bring the power of open, hyperscale AI networking to the enterprise,” Robbins said.

And third, AI network connectivity. “Customers are leveraging our technology platforms across switching, routing, security and observability to modernize, secure, and  automate their network operations to prepare for pervasive deployment of AI applications,” Robbins said.  “This, combined with mature back-end models will lead to increased capacity requirements from both private and public front-end cloud networks,” Robbins said.

While AI networking is just at the beginning, enterprise networking is Cisco’s bread-and-butter and at least in the second quarter of 2025, results are positive.

“Networking product orders grew double-digits driven by switching, enterprise routing, webscale infrastructure, and industrial networking applications in our IoT products,” Robbins said.

“Campus switching orders were up double digits and we expect our campus switching portfolio, as well as our WiFi 7 access points, to gain traction with increasing return-to-office policies,” Robbins said.

“We also continue to see robust order growth for data center switching, this being our fourth consecutive quarter of double-digit growth,” Robbins said.   “We expect this to continue as our 800G Nexus switches based on our 51.2 terabit Silicon One chip become available in April for AI cloud buildouts.”

Robbins also noted strong demand for the vendor’s  Industrial Internet-of-Things product line that includes  its ruggedized Catalyst networking products.

“In the first half of fiscal year ’25, orders grew more than 40% and, in Q2, we saw growth of more than 50%, signaling an acceleration as customers prepare for the deployment of AI-powered robotics and industrial security,” Robbins said.