Cisco Q2 Earnings Loom: Buy or Hold the CSCO Stock Ahead of Results?

Core Viewpoint - Cisco Systems (CSCO) is expected to report its second-quarter fiscal 2026 results on February 11, with anticipated revenues between $15 billion and $15.2 billion and non-GAAP earnings per share between $1.01 and $1.03 [1][10]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for revenues is $15.12 billion, reflecting an 8.1% growth from the previous year [2]. - The consensus estimate for earnings is steady at $1.02 per share, indicating an 8.5% year-over-year growth [2]. Performance Trends - Cisco's earnings have consistently surpassed the Zacks Consensus Estimate in the last four quarters, with an average beat of 3.22% [5]. - The consensus estimate for fiscal second-quarter Networking revenues is $7.74 billion, showing a 13% increase from the year-ago quarter [8]. - Security revenues are estimated at $2.15 billion, reflecting a 2% growth year-over-year [9]. Key Growth Drivers - Strong demand for AI infrastructure and campus networking solutions is expected to benefit Cisco's second-quarter results, driven by its innovative networking portfolio and AI-native security solutions [7]. - The company anticipates shipping its one millionth Silicon One chip in the upcoming quarter, indicating robust demand [7]. - Cisco's strategy of integrating AI across its Security platforms and the acquisition of Splunk are contributing to revenue growth [9]. Market Position and Competition - Cisco shares have appreciated 35% over the past 12 months, outperforming the Zacks Computer & Technology sector and competitors like Dell Technologies, Arista Networks, and Hewlett-Packard Enterprise [12]. - Despite strong performance, Cisco faces stiff competition from companies such as Arista Networks and Dell Technologies in the AI networking and enterprise security markets [15]. Future Outlook - Cisco expects to recognize approximately $3 billion in AI infrastructure revenues from hyperscalers in fiscal 2026, with a growing pipeline exceeding $2 billion for high-performance networking products [19]. - The company is also benefiting from strong demand for ruggedized equipment in its industrial IoT portfolio, driven by onshoring and increased AI workloads [20].