Cisco's 60% stock surge meets a margin wall

Cisco shares rose over 60% in 2026 on AI demand — networking product orders jumped more than 50% — but pulled back after Q4 earnings showed GAAP gross margin falling to 66.3% from 68.4% a year earlier. The company guided Q1 adjusted gross margin of 65%–66%, below Street estimates of 66.10%. For investors, the AI "supercycle" is real; the profit math is the catch.