Cisco Systems Sees AI Agents Fueling a Multi-Year Networking Boom

Cisco Systems Sees AI Agents Fueling a Multi-Year Networking Boom Written by MarketBeat September 8, 2026 Add As Preferred Source Share Share Share This Article Link copied to clipboard. Close Image from MarketBeat Media, LLC. Key Points AI agents are driving a multi-year networking demand cycle because they consume significantly more bandwidth than human users and operate continuously. Cisco said hyperscaler AI orders reached $9.3 billion in the last fiscal year, including $4 billion in the fourth quarter. Cisco is seeing broad-based growth beyond hyperscalers, with campus and branch networking expanding about 20% for several quarters and companywide orders rising 40% in the latest quarter. The company estimates more than $100 billion in installed-base upgrade and refresh opportunities over the next several years. Security and networking are increasingly converging as AI raises cyberattack risks. Cisco expects high-single-digit security revenue growth in fiscal 2027, while pursuing an integrated technology stack spanning silicon, networking, software, security and observability. Five stocks we like better than Cisco Systems . The AI Boom Is Turning This Cable Maker Into a Stock to Watch Cisco Systems NASDAQ: CSCO executives said demand tied to artificial intelligence, infrastructure modernization and security is supporting what the company views as a multi-year networking growth cycle. Speaking at the Goldman Sachs Communacopia + Technology Conference, President and Chief Product Officer Jeetu Patel said the shift toward AI agents is increasing demand for high-performance, low-latency networks and machine-scale security. He cited OpenRouter data indicating that agents consume about 60% of total inference capacity and said their token consumption has increased 14-fold since February. Get Cisco Systems alerts: Sign Up 5 Tech Stocks Holding Their Ground Through the AI Trade Pullback “These agents tend to be far more consumptive on network bandwidth than humans,” Patel said, estimating that an agent uses about 450% more bandwidth than a human performing the same task. He said the growing use of agents, which can operate continuously, is creating sustained infrastructure requirements rather than demand limited to experimentation or model training. AI Demand Across Customer Segments Patel said Cisco sees opportunities across hyperscalers, neoclouds, sovereign clouds, service providers, enterprises and edge deployments. He said Cisco’s hyperscaler AI orders rose from nearly zero two years ago to $9.3 billion in the last fiscal year, including $4 billion in orders during the fourth quarter. Palantir’s Earnings Setup Puts Its AI Growth Story Back on Trial Again The company also said AI-related demand is extending into its traditional enterprise networking business. Patel said Cisco’s campus and branch networking business, which historically grew at roughly 3% to 4%, has expanded about 20% for several quarters. He attributed that growth to infrastructure refresh cycles, demand for lower-latency networking and heightened security concerns around aging equipment. Chief Financial Officer Mark Patterson said networking has delivered double-digit growth for eight consecutive quarters and that companywide orders grew 40% in the latest quarter. Excluding hyperscalers, Patel said orders grew 25% in the fourth quarter. Patterson said Cisco has identified more than $100 billion in upgrade and refresh opportunity involving its own installed base over the next several years. The company is also pursuing replacement opportunities involving competitors’ end-of-life and end-of-support products, he said. Security and Modernization Cisco executives emphasized the convergence of networking and security as AI expands the potential scale of cyberattacks. Patterson said companies increasingly view modernization as a security requirement, rather than a discretionary return-on-investment decision, because frontier AI models can identify and exploit vulnerabilities at machine scale. Patel said Cisco’s advantage is its ability to integrate security capabilities into networking infrastructure. He highlighted the company’s smart switches, which combine firewall and switching functions, as well as security, observability and data capabilities intended to help customers manage AI environments. For fiscal 2027, Patterson said Cisco expects high-single-digit growth in security revenue after low-single-digit growth in fiscal 2026. He said Splunk is expected to return to positive growth as the company laps a transition from on-premises deployments to cloud offerings. Cisco added 1,500 new customers for its newer security products in the fourth quarter, he said, while firewall revenue grew more than 30% for two consecutive quarters. Services revenue is also expected to turn positive and reach mid-single-digit growth by the end of fiscal 2027, Patterson said. He attributed the anticipated improvement partly to services and subscription revenue attach