(Reuters) – Cisco Systems (CSCO) raised its annual revenue forecast on Wednesday, a sign of picking up demand as the computer networking equipment maker shifts focus to cybersecurity, cloud systems and AI-driven products.
Companies have increased investments in AI technologies that require a lot of computing power, causing a spike in demand for data centers that use Cisco products such as Ethernet switches and routers.
“Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio,” CEO Chuck Robbins said in a statement.
Cisco is a major supplier of networking equipment, including Ethernet switches, which connect devices such as computers, laptops, routers, servers and printers to a local network.
The company had announced two layoffs this year in an effort to cut costs and focus investment on areas such as cybersecurity.
Cisco completed its $28 billion acquisition of Splunk in March, which aims to boost its software business amid an AI boom while helping offset a post-pandemic demand slowdown by improving its cybersecurity capabilities .
Cisco now expects annual revenue to be between $55.3 billion and $56.3 billion, up from its previous forecast of between $55.0 billion and $56.2 billion.
Revenue fell 6% to $13.84 billion for the first quarter ended Oct. 26, compared with estimates of $13.77 billion.
The company reported adjusted earnings per share of 91 cents, compared with estimates of 87 cents.
Rival Arista Networks earlier this month forecast fourth-quarter revenue above Wall Street estimates.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Maju Samuel)
