Cisco Systems forecast first-quarter revenue above Wall Street estimates on Wednesday, as the artificial intelligence boom boosted demand for its networking equipment from cloud customers.

Hyperscale cloud investments are healthy and driving IT infrastructure financing, which sets up a good backdrop for Cisco.

“Within the enterprise spending environment, there is incremental spending to beef up the infrastructure to accommodate AI, so that could potentially be another growth driver, especially with Cisco having such a big presence in the traditional enterprise market,” Edward Jones analyst David Heger said.

Big tech firms such as Microsoft, Amazon and Alphabet are ramping up spending to ease capacity shortages that have limited their ability to meet AI demand, even after several quarters of multi-billion-dollar outlays.

Cisco’s AI infrastructure orders exceeded $800 million in the fourth quarter, bringing the total for fiscal 2025 to over $2 billion, more than double its original target, CEO Chuck Robbins said on a post-earnings call.

The company has not seen any pull-forward in demand for products, but did note a small impact from tariffs in the quarter and during the fiscal year, he added.

“We expect the sovereign AI opportunity to build momentum in the second half of fiscal 2026. Cisco will be a core system provider for these significant AI training and inference cluster build outs and integral to their development and eventual hyperscaling.”

Cisco has partnered with Humain, Saudi Arabia’s state-backed AI company, and it will provide digital solutions for Bahrain’s government information and telecommunications infrastructure.

The company expects revenue to be between $14.65 billion and $14.85 billion for the first quarter, compared with analysts’ average estimate of $14.62 billion, according to data compiled by LSEG.

Its revenue for the fourth quarter ended July 26 came in at $14.67 billion, compared with estimates of $14.62 billion.

Networking product orders grew in the double digits during the quarter, driven by webscale infrastructure, switching, enterprise routing, industrial IoT and servers.