Cisco is selling AI server hardware for the first time, partnering with Supermicro to add rack-scale, liquid-cooled Nvidia systems to its own product line starting October 2026. Cisco shares rose modestly on the news while Supermicro jumped further, and Cisco disclosed no committed order volume or pricing under the arrangement.
Cisco Systems (CSCO) is now selling AI server hardware directly, through a new partnership with Super Micro Computer Inc. (SMCI) that pulls the networking giant deeper into a business it has traditionally left to others.
Cisco said Tuesday, August 25, that it is expanding its Secure AI Factory with Nvidia architecture to include Supermicro's liquid- and air-cooled server systems, now sold and validated as part of Cisco's own AI infrastructure portfolio rather than offered as a third-party option. The combined stack becomes compliant with Nvidia's Cloud Partner program, a credential that neoclouds and sovereign cloud operators look for before signing large contracts. Cisco President and Chief Product Officer Jeetu Patel framed the move around the scale of the buildout, saying the industry is at "one of the largest datacenter buildouts in history."
Why Cisco needed a hardware partner
Cisco's own hardware has always been networking gear, not the dense GPU servers that run AI workloads. Supermicro fills that gap with rack-scale systems built for Nvidia's newest platforms, including the Vera Rubin NVL72, a rack that can draw more than 200 kilowatts of power. That power draw is the real constraint behind the deal — air cooling cannot keep up with racks that dense, so the partnership centers on liquid cooling that links Cisco's networking gear directly to Supermicro's compute hardware. Cisco says it is the only Nvidia technology partner building an NCP-compliant architecture on its own networking silicon, a distinction that lets it sell a fuller slice of the data center stack instead of competing purely on switches.
Wall Street stays bullish on the pivot
Cisco shares rose roughly 1% Tuesday following the announcement. Twenty six analysts polled by S&P Global rate the stock a consensus Buy with an average price target near $133. Morgan Stanley reiterated an Overweight rating and a $135 price target on August 24, pointing to upcoming scale-across AI deployments as a primary driver of Cisco's next growth phase.
Supermicro's reaction was sharper: SMCI jumped about 9% Tuesday, a move partly tied to the Cisco news and partly to unrelated legal clarity after Taiwanese prosecutors charged former associates without implicating the company itself. Still, nineteen analysts covering Supermicro rate it a consensus Hold, with an average price target near $42. That caution sits next to Supermicro's own numbers: fiscal fourth-quarter revenue reached $11.1 billion, up from $5.8 billion a year earlier, while gross margin recovered to 17.5% from 9.5%. The company also guided fiscal 2027 revenue to $65 billion to $72 billion, more than 75% above this year at the midpoint.
Cisco disclosed no committed order volume or pricing under the arrangement, leaving the revenue impact unquantified for now. Supermicro's systems become available through Cisco's channel starting in October 2026, giving both companies a concrete date to show whether the partnership converts into actual orders.
Source: TheStreet
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