Cisco's full-year AI infrastructure orders reached $9.3 billion, nearly double its original $5 billion target, after a fourth-quarter revenue beat driven by its networking refresh. Broadcom's AI semiconductor business grew faster and carries a larger backlog, making it the stronger AI trade on current numbers even as Cisco's enterprise base offers steadier footing.
Cisco Systems and Broadcom both closed AI-heavy quarters this month, and the results land on opposite ends of the infrastructure buildout. Cisco reported $17.3 billion in Q4 FY2026 revenue on August 12, powered by an enterprise networking refresh. Broadcom's Q2 print on June 3 brought in $22.2 billion on a hyperscaler-driven AI silicon surge.
Cisco's Networking Refresh Beats Its Own Target
Cisco's networking segment, its main AI vehicle, grew 28% year over year with product orders up 40%. Q4 AI infrastructure orders hit $4 billion, and full-year AI orders reached $9.3 billion, well above the initial $5 billion target.
CEO Chuck Robbins told analysts, according to 24/7 Wall St.: "We believe the accelerating adoption of agentic AI is fueling a networking super cycle." Acacia optics alone booked over $1 billion in Q4 orders, and the strength runs across the portfolio: Splunk added more than 280 new logos, firewall orders rose more than 30%, and campus orders climbed 20%.
Broadcom's Custom Silicon Grows Faster, But Concentrates Risk
Broadcom is playing a different game. Q2 AI semiconductor revenue was $10.8 billion, up 143% year over year, with Q3 guided to $16 billion. CEO Hock Tan flagged AI bookings above $30 billion and reiterated a fiscal 2027 AI target in excess of $100 billion, with custom XPUs for Google, Meta, OpenAI, and Anthropic anchoring the story.
That backlog extends visibility to 2028, but it concentrates among six frontier AI labs. Reddit sentiment on Broadcom's stock flipped to very bearish in early August after OpenAI cost debates spread.
Valuation Tilts Toward Broadcom, But Cisco Offers Steadier Income
On a pure AI-exposure basis, Broadcom screens more favorably: its 23x forward P/E against more than 200% AI revenue growth compares with Cisco's 26x forward P/E for roughly 15% total growth. Broadcom's revenue grew 47.9% year over year against Cisco's 17.6%, and its operating margin reached a record 67% versus Cisco's 35.9% non-GAAP.
Cisco, however, fits a different investor profile. Its 1.37% dividend yield and $8.1 billion buyback authorization sit alongside a diversified enterprise base. That said, gross margin slipped 210 basis points year over year on memory cost pressure. Cisco has guided fiscal 2027 revenue to a range of $72.2 billion to $73.4 billion, a target that depends on holding that margin line.
Source: 24/7 Wall St.
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