StreetSignal

CSCO Earnings Preview

THE SETUP

Consensus is pricing in a top-line beat driven by campus, data center, and Wi-Fi strength, with pull-forward demand ahead of Cisco’s price increases acting as an incremental tailwind above an already healthy underlying backdrop. The single most-watched line is AI orders: the Street expects at least $2B in FQ3 (vs. $1.3B in FQ1 and $2.1B in FQ2), with a raise of the FY26 AI order outlook to ~$6B serving as the key positive catalyst. Product gross margin trajectory is the second swing factor — investors want confirmation that the two major price increases (plus a third for UCS) are protecting margins, with FQ3 expected to represent a trough. Product orders growth in the 15–18% range is seen as constructive; a number above 20% without a large AI orders figure would raise pull-forward concerns. Security remains a drag, with Splunk commentary cautious and CSCO not viewed as competing effectively against PANW/CRWD in endpoint and broader security.