Cisco CEO Declares a 'Networking Supercycle' as AI Demand Drives Stock Surge

Cisco Systems is riding a wave of AI-fueled demand that its CEO, Chuck Robbins, describes as a "networking supercycle." The company's shares jumped 14% on Thursday, on track for their best single-day performance in over two decades, after it revealed that orders for AI infrastructure and hyperscaler projects had far exceeded expectations.

The networking giant raised its full-year guidance for this segment from $5 billion to $9 billion. At the same time, Cisco announced it would cut roughly 5% of its workforce, reallocating resources toward AI-focused areas, silicon development, and optics. "Given the speed at which the market is moving, we need a rapid reallocation of resources," Robbins told CNBC. He noted that many affected employees would likely find new roles within the company.

Cisco has lagged behind hyperscaler rivals in the AI race led by Nvidia, but its stock recently surpassed dot-com boom highs as investors bet on the networking gear essential for data centers. Robbins acknowledged the challenge of forecasting in a volatile AI market, saying the company has passed on some hyperscaler projects. "We don't have complete visibility, but we understand our relationships and design wins well enough to feel good about our direction," he explained.

On the topic of the Mythos AI model - which has sparked market hysteria and White House discussions - Robbins said Cisco is now discussing it with every customer. Cisco is part of Anthropic's Project Glasswing, which recently gave select businesses early access to test the model's cybersecurity implications. The potential risks have accelerated security upgrades across the industry. "You have to be agile and ready to move," Robbins said.

Source: CNBC