Good morning. It took Cisco nearly 26 years to reclaim its March 2000 peak. It’s taken just five months to leave it in the dust.
Shares of the networking giant in business for over 40 years surged more than 13% Thursday to an intraday record of $119.36, capping one of the most improbable turnaround stories in modern market history. The catalyst: a Q3 earnings report that showed CEO Chuck Robbins’ multi-year bet on AI infrastructure is paying off.
Record revenue of $15.8 billion, up 12% year-over-year, topped the high end of guidance. Management raised the FY26 AI revenue target to $4 billion (from $3 billion) and lifted AI orders guidance to $9 billion (from $5 billion). Q4 revenue guidance of up to $16.9 billion came in above consensus, and non-GAAP operating income hit a record. The company also announced on Wednesday a Q4 workforce reduction of fewer than 4,000 jobs—less than 5% of total headcount. Cisco frames the cuts as an AI-driven strategic shift, which reallocates investment toward AI infrastructure, silicon, optics, and security, rather than AI directly replacing workers. Morningstar, which rates Cisco a wide moat, just raised fair value to $90 from $75.
Founded in 1984, Cisco was once the backbone of the internet—and briefly the most valuable company in the world during the dot-com era, before the bubble burst. Read more about Cisco’s road to AI here.
Cisco’s comeback reflects a broader reckoning. BCG’s research finds just 5% of companies are “AI future-built,” capturing 5x the revenue gains and 3x the cost reductions of their peers. MIT Sloan’s manufacturing study documented an “AI adoption J-curve”—short-term losses are steeper for older, established companies, but early adopters outperform peers on productivity and market share over four-plus-year horizons. Cisco’s multi-year pivot is gaining steam, just as that pattern suggested.
Have a good weekend.
Sheryl Estrada
[email protected]
Leaderboard
Notable moves this week:
Kristian Talvitie was appointed CFO of BetterUp, a virtual coaching and professional development company, effective immediately. Talvitie joins BetterUp from PTC, a global industrial software company, where he served as EVP and CFO. Before that, he served as CFO of Syncsort (now Precisely), and Sovos Compliance. Earlier in his career, Talvitie held senior finance roles at PTC, including corporate vice president of finance and vice president of FP&A. He also held leadership roles at Plexus, including vice president of marketing and market sector vice president.
Tobias Wessels was appointed CFO of Torc Robotics, an autonomous vehicle company focused on developing self-driving trucks. Wessels brings more than two decades of experience. He joins Torc from Helm.ai, where, as chief development officer he led finance, corporate development, and international expansion. He previously served as chief corporate development officer at autonomous delivery company Udelv, and earlier as CFO of X, the moonshot factory at Alphabet.
Anuj Girdhar was appointed CFO of Sunkist Growers, Inc. Girdhar brings more than 20 years of financial leadership experience within the agriculture and beverage industries. Most recently, he served as CFO at O’Neill Vintners & Distillers. Before that, he held leadership roles at E. & J. Gallo Winery, including director of financial planning and analysis.
Aylwyn Bryan was promoted to CFO of CRH (NYSE: CRH), a provider of building materials, effective May 12. Bryan has over 25 years of financial leadership experience, including the past 14 years with CRH. Most recently he served as CFO of CRH’s Americas Division and previously as head of group finance and group tax director. Bryan succeeds Nancy Buese, who has stepped down by mutual agreement and will remain with CRH for a three-month period to support a smooth transition.
Deepak Ahuja was appointed CFO of Redwood Materials, a battery recycling and energy storage company. Ahuja brings decades of financial leadership, including serving as Tesla’s CFO across two tenures, where he helped take the company from early-stage startup through its 2010 IPO and on to becoming a global company. After Tesla, he served as CFO of Verily Life Sciences and then as chief business and financial officer at Zipline, the drone delivery and logistics company.
Eric Brenner was appointed CFO and treasurer of Koppers Holdings Inc. (NYSE: KOP), a manufacturer of wood products, wood treatment chemicals, and carbon compounds, effective May 26. Brenner most recently served as SVP and CFO for NOVA Chemicals Corporation. Before that, he worked in a variety of financial roles of increasing responsibility, ultimately as director of finance at Komatsu Mining Corp. (formerly Joy Global Inc.), and as audit manager with Deloitte & Touche LLP.
Big Deal
Exposure metrics highlight where AI pressure may be greatest. However, BofA Global Research assesses that labor market outcomes depend more on an economy’s ability to adapt through skills, institutions, and workforce quality.
Going deeper
Here are four Fortune weekend reads:
“Jenn Hyman steps down as CEO of Rent the Runway: ‘I’ve left it all on the field’”—Emma Hinchliffe
“Meta’s $10 billion Louisiana data center is getting $3.3 billion in tax breaks—more than seven years of the state’s entire police budget”—Jake Angelo
“The airplane fuel shortage is a myth propagated by airlines who want to cancel unprofitable flights, says private jet CEO”—Jim Edwards
“Half of older Americans are unfulfilled. Their doctors can’t see it”—Nick Lichtenberg
Overheard
“As AI alters the nature of entry-level work, institutions can no longer assume students will gain practical experience after graduation. Increasingly, workforce readiness must be embedded directly into the educational experience itself.”
—Michael Hansen, CEO of Cengage, a global edtech company, writes in a Fortune opinion piece.
