Cisco executives told the Goldman Sachs Communacopia + Technology Conference on Tuesday, September 8, 2026, that AI is driving a broad network upgrade cycle across hyperscalers, neo clouds, sovereign clouds, enterprise on-premises data centers and the edge. President and Chief Product Officer Jeetu Patel and Chief Financial Officer Mark Patterson, speaking with Goldman Sachs analyst Michael Ng, described demand from agentic AI, security refresh and infrastructure modernization. Cisco's market capitalization was $430.81 billion, with the stock at 109.30 USD, up 0.10 or 0.09%. The company's dividend yield was 1.54%, following 16 consecutive years of dividend increases.
Cisco reported hyperscale AI orders of $9.3 billion for the full year, including $4 billion in the latest quarter, up from $2.3 billion two years earlier. Overall company orders rose 35% in each of the past two quarters, while fourth-quarter orders excluding hyperscalers grew 25%. Fiscal 2027 revenue guidance implies 15% total growth at the midpoint, with underlying growth remaining in double digits even without AI-related effects. Gross margin for fiscal first quarter 2027 is guided to 65% to 66%. Fourth-quarter operating margin reached a record level, up almost two percentage points year over year. Gross margin rose about two points year over year in the quarter, while operating expenses fell nearly four points as a share of revenue. Cisco returned nearly 100% of free cash flow to shareholders in the last fiscal year.
Patel said agentic AI adoption remains below 2% in both enterprise and consumer markets. Agents now consume about 60% of global inference capacity or total token volume, and agent token consumption has risen 14 times since February. An OpenRouter study released in February showed that agent token consumption had exceeded human token consumption. Cisco said agents use about 450% more network bandwidth than humans for the same tasks. Globally, 60% of compute capacity is consumed by inferencing rather than training.
Networking revenue has posted double-digit growth for eight consecutive quarters. Campus and branch networking, which historically grew at 3% to 4%, has grown at about 20% for several quarters. Firewall refresh products grew more than 30% for two straight quarters. Security revenue is guided to high single-digit growth in fiscal 2027, up from low single-digit growth in fiscal 2026. Services revenue is expected to reach mid-single-digit growth by the end of fiscal 2027. New security products signed up 1,500 new customers in the fourth quarter alone. Cisco has more than 960,000 customers, and management valued the end-of-life and end-of-support refresh and modernization opportunity at more than $100 billion. Patterson said infrastructure refresh is becoming a security imperative, with boards and chief executives seeking visibility into their environments and upgrade paths.
Cisco plans to achieve complete independence from merchant silicon providers by 2029. Its Silicon One G300 chip features close to a quarter trillion transistors on a 100-millimeter package substrate. Hyperscale AI orders have historically split roughly 60% between Silicon One-based systems and 40% optics. The company said 32,000 engineers are using AI tools in product development. A platform unification effort was completed in nine months instead of the expected seven to 10 years. By the end of this year, about half a dozen products are expected to be 100% AI-written, and by the end of next year, 70% of the portfolio is expected to be entirely AI-written with no human lines of code.
