Cisco (CSCO) is thundering in AI.
On Tuesday, at its annual Partner Summit conference in Los Angeles, Cisco announced new high-density GPU servers for customers who want to train language models at scale. It also unpacked AI PODS, a product designed for clients keen on inference, the process that artificial intelligence models use to draw conclusions from new data.
Cisco says both products are built to handle intensive AI workloads powered by NVDA accelerated computing.
“This is a really important event for us, and we’re taking this opportunity to make some really exciting announcements about AI infrastructure,” Cisco Chairman and CEO Chuck Robbins told Yahoo Finance. I decided to start.”
Robbins aims to maintain momentum with Cisco’s foray into AI.
The company has shipped $1 billion in orders to five of the top six hyperscalers. It expects an additional $1 billion this fiscal year.
“I think 2025 will be the year of enterprise applications,” Robbins added. “I think we’ve seen a focus on training models that are out there, like ChatGPT and Anthropic, and all these models that people are using, and now companies are I think we’re starting to seriously understand what kind of use cases we can use.” ”
The decline in AI products comes as Cisco’s stock price, which has been mostly dead money for the past year, is starting to recover amid some difficult quarters.
The networking giant’s stock has risen nearly 20% over the past three months, outpacing the S&P 500 index (^GSPC)’s 7% rise. Shares of rival Hewlett Packard Enterprise (HPE) have fallen 3% in recent months.
Cisco stock continues to underperform, rising just 9% over the past year compared to the S&P 500’s 40% rise.
The stock’s recent resurgence was helped by better-than-expected fourth-quarter results announced in mid-August. Cisco surprised some on the street with a 14% increase in product orders and optimism about integrating its $28 billion acquisition of Splunk.
And just as Cisco helped lay the structural pipes during the rise of the Internet in the 1990s and early 2000s, we believe Cisco will play a key role in building the world’s AI infrastructure. Now I feel more secure.
Network revenue, a key driver of Cisco stock sentiment, rebounded in the quarter, raising expectations for further gains over the next 12 months.
“We believe there is a lot of upside potential to current guidance, but importantly, we expect sales and margins to be There are multiple factors contributing to the upward trend.” Daryanani says the successful integration of Splunk and continued improvement in network demand are key to Cisco’s outperform rating.
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