Cisco Systems (CSCO) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Demand trends and growth

• Achieved 18% product order growth in fiscal Q2, with double-digit growth across all geographies and verticals, excluding hyperscale which alone contributed $2.1 billion in new AI infrastructure orders in 90 days.

• Campus refresh and AI infrastructure are identified as multi-billion dollar, multi-year opportunities, with rapid adoption of new platforms in wireless, routing, and switching.

Gross margin dynamics and mitigation

• Gross margins faced pressure due to a mix shift toward hardware and rising memory prices; mitigation includes price increases, tightening terms with partners, and leveraging financial strength for supply security.

• Hardware growth exceeded 20% in Q2, while software, especially security, was softer; focus remains on maintaining strong operating margins, with Q2 posting the highest in four quarters.

Software and recurring revenue

• Software and subscriptions accounted for just over 50% of business in Q2, with $43 billion in remaining performance obligations (RPO) supporting predictable, durable growth.