Cisco shares surged 17 per cent to a record-high on Thursday, set for their biggest single-day gain in over two decades, after it posted AI demand-powered strong results and announced nearly 4,000 job cuts to redirect investments into technology. The jump, if sustained, would mark the best day for the stock since a robust earnings reports in May 2002 sparked a furious rally in the aftermath of the dotcom crash. The networking gear maker’s near-US$400 billion market capitalization was set to swell by about US$70 billion. Cisco has emerged as a big winner from Big Tech’s AI spending spree, thanks to its key role in supplying gear crucial to the functioning of data centers. The stock had gained 32 per cent this year by Wednesday’s close. The company raised its annual revenue forecast on Wednesday and said its AI-focused restructuring, expected to cost US$1 billion, will shift investments toward AI and related growth avenues. The fourth-quarter retrenchments would represent less than five per cent of its workforce, Cisco said. It added that it was strategically investing in silicon, optics, security as well as employees’ use of AI across-company and reducing roles in some areas. “Cisco feels a lot like Intel here, as the puck has gone to where CEO Chuck Robbins invested — rewarding the company for its custom silicon and optics,” said analysts at Melius Research. The firm has taken US$5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year order expectation to US$9 billion from US$5 billion previously. The San Jose, Calif.-based company supplies high-speed networking equipment, such as switches and routers, that data centers use to run AI. “We think this networking momentum can continue as this space has a clear secular tailwind from AI inference,” Melius added. Last month, Cisco unveiled switches designed to connect different types of quantum computers, advancing its push toward a network of quantum machines, in line with efforts by peers such as Alphabet’s Google and IBM. (Reporting by Kanishka Ajmera in Bengaluru; Editing by Joyjeet Das)
