Cisco set a high bar for itself in the new year after a prolific 2025.
Last year, Cisco refreshed its core switching and router portfolios, adding new software capabilities for the data center in 2025. It also made a number of AI networking moves, including the introduction of the Cisco 8223, a high-end, 51.2 Tbps router and chip designed for distributed AI workloads.
In addition, Cisco expanded its Nvidia relationship with a number of joint offerings, including the Cisco N9100 series data center switch. The 64-port, 800Gb Ethernet switch is powered by Nvidia’s Spectrum-4 ASIC, which is designed for AI, high-performance computing and cloud data center networks that require ultra-low latency, congestion control, and predictable performance.
Cisco also teamed with Nvidia and VAST Data to offer customers a pre-integrated AI infrastructure package, including compute, network, storage and data, to support AI workload data fabrics as well as large-scale training and inference.
The demand for AI infrastructure has already begun to impact Cisco’s earnings, and the vendor expects continued growth.
At the close of its 2025 fiscal year in late July, Cisco reported revenue of $14.7 billion for the fiscal fourth quarter, which is up 8% compared to the year-earlier quarter. Annual 2025 revenue came in at $56.7 billion, which is up 5% from the previous year.
“Enterprise product orders were up 5% year-over-year in Q4 [while] networking product orders grew double digits in Q4, marking the fourth consecutive quarter of double-digit growth,” CEO Chuck Robbins said at the time. “There is strong interest from customers in the new family of Cisco Catalyst 9000 smart switches, along with a completely refreshed lineup of highly secure routers, wireless access points, and industrial IoT devices, which are purpose-built for the AI-ready campus and branch.”
Expect Cisco to continue adding to and solidifying these products in the coming year, industry watchers say, as the vendor goes after what it sees as a multi-year, multi-billion-dollar refresh opportunity in the enterprise networking arena.
It’s an Ethernet world
Efforts to extend Ethernet’s dominance are gaining traction, which could benefit Cisco.
In a note about 2026 data center networking predictions, analyst Sameh Boujelbene stated that scale-up is emerging as a new battlefield for Ethernet:
“After securing a leading position in the scale-out segment of AI back-end networks, Ethernet is now expanding into scale-up, where NVLink has historically dominated. In this space, Ethernet will compete not only with NVLink but also with UALink, another alternative to NVLink,” wrote Boujelbene, vice president of the Dell’Oro Group. “We anticipate 2026 will be a year full of vendor announcements targeting both Ethernet and UALink opportunities in scale-up. Scale-up represents what could be the largest total addressable market expansion the industry has ever seen.”
In 2025, Ethernet overtook InfiniBand in AI back-end networking — “a decisive turning point,” Boujelbene wrote. “This shift is particularly striking given that just two years ago, InfiniBand accounted for nearly 80% of the data center switch sales in AI back-end networks.”
The rapid adoption of Ethernet in AI back-end deployments propelled total Ethernet data center switch sales to an all-time high in 2025, nearly doubling annual revenues compared with 2022 levels, Boujelbene stated. “800 Gbps well surpassed 20 M port within just three years of shipments: As a point of reference, it took 400 Gbps six to seven years to achieve the same milestone.”
Adding to the Ethernet effort are groups such the Ultra Ethernet Consortium and the Ethernet for Scale-Up Networking, which are working to adopt Ethernet for AI and high-performance computing. Cisco is a contributor to both efforts.
“Cisco is a giant incumbent, which means that they win by default as long as they don’t mess up too badly,” said Tom Nolle, principal analyst at Andover Intel and a Network World columnist. “Thus, they need to kiss the usual networking babies, meaning AI and security. The key for them is to be meaningful in those spaces so a competitor doesn’t steal customers/market share.”
AI infrastructure momentum
Demand for AI infrastructure is growing at an exponential rate, which stands to benefit Cisco and its major competitors, including Arista, HPE/Juniper, and Extreme.
Total global data center IT equipment spend — including servers, accelerators (XPUs), networking, optics, and storage — between 2025 and 2030 is expected to reach as much as $4.7 trillion dollars, according to a McKinsey & Company report cited in a blog post by Jake Katz, Cisco’s vice president, AI product management.
Hyperscalers are responsible for over 60% of this infrastructure investment, Katz noted. Neoclouds are responsible for about 17%, and their share is expected to grow to over 30% over the next ten years, Katz stated.
While most of the demand for AI data center capacity today comes from hyperscalers and neocloud providers, that will change as enterprise customers delve more into the AI networking world.
“The other ecosystem members and enterprises themselves are becoming responsible for an increasing proportion of the AI infrastructure buildout as inferencing and agentic AI, sovereign cloud, and edge AI become more mainstream,” Katz wrote.
More enterprises will move to host AI on premises via the introduction of AI agents that are designed to inject intelligent insight into applications and help improve operations. That’s where the AI impact on enterprise network traffic will appear, suggests Nolle.
“Enterprises need to host AI to create AI network impact. Just accessing it doesn’t do much to traffic. Having cloud agents access local data center resources (RAG etc.) creates a governance issue for most corporate data, so that won’t go too far either,” Nolle said.
“Enterprises are looking at AI agents, not the way hyperscalers tout agentic AI, but agents running on small models, often open-source, and are locally hosted. This is where real AI traffic will develop, and Cisco could be vulnerable if they don’t understand this point and at least raise it in dialogs where AI hosting comes up,” Nolle said. “I don’t expect they’d go too far, because the real market for enterprise AI networking is probably a couple years out.”
Meanwhile, observers expect Cisco to continue bolstering AI networking capabilities for enterprise branch, campus and data centers as well as hyperscalers, including through optical support and other gear.
Infrastructure modernization fueled by Cisco-Nvidia pairing
Technology solutions provider World Wide Technology recently published its IT infrastructure Modernization Priorities for 2026 report, which found that many organizations are still reliant on outdated, legacy infrastructure that is ill-equipped to handle modern workload requirements. The rise of AI has heightened the importance of IT modernization, World Wide Technology said.
Cisco’s wide-ranging partnership with Nvidia reinforces its plans to promote that kind of modernization.
For enterprise customers, one of the most interesting parts of the Cisco-Nvidia collaboration is the tie-in between Cisco’s Silicon One-based switches and Cisco N9100 Series Switches that incorporate Nvidia’s Spectrum-X Ethernet switch silicon and are managed from the Cisco Nexus dashboard.
“Embedding Spectrum X technology into a Nexus environment, where customers already likely have the skill sets, they know how to manage and run that environment, is a brilliant move,” Neil Anderson, vice president and CTO of cloud, infra, and AI solutions for World Wide Technology, told Network World. “If you’re a bank customer for example, you may have already qualified on Nexus. Now all you have to do is incorporate the Nvidia technology — it just accelerates the ability to adopt it and support it.”
One of the reasons Nvidia is partnering with Cisco is because they know that this distributed phenomenon is going to happen, Anderson said. “And they need somebody that’s got deep network experience to extend a cluster and make it distributed.”
Another element of the Nvidia partnership that’s expected to influence Cisco’s 2026 efforts is the Cisco Secure AI Factory with Nvidia, which brings together Cisco security and networking technology, Nvidia DPUs, and storage options.
“The notion of a secure AI factory and what they’re doing with Nvidia there is unique in the market to me, and it resonates with our clients. Because if you’re going to run your intellectual property on that distributed cluster, you’ve got to have security in the stack, and that’s what this addresses,” Anderson said. “I am encouraging them to keep doubling down on that one in 2026.”
Not related to the Nvidia partnership but solidly focused on distributed AI is Cisco’s new Unified Edge offering, according to Anderson. The Unified Edge, announced in November, is an integrated package of networking, compute and storage aimed at helping enterprise customers more efficiently handle data from AI and other workloads at the edge, where the data is typically created.
Ultimately, customers are moving from centralized genAI clusters in the data center to highly distributed AI that lives closer to the edge where data is created, Anderson said. “This package offers the distributed performance and simplicity we think will be an important, useful offering for customers.”
