Cisco Systems shares were down as much as 13% in extended trading on Wednesday after the networking hardware maker issued a dampened forecast for the current quarter and the full fiscal year.
Revenue increased by 7.6% in the fiscal first quarter, which ended on October 28. Net income, at $3.64 billion, rose from $2.67 billion in the same quarter a year ago.
During the quarter just ended, new product orders slowed. However, this was not all bad news because it meant clients were busy installing and implementing products after taking big orders in the three previous quarters.
The company is projecting that one or two quarters of shipped products are waiting to be implemented, which will boost revenue.
Cisco, like many hardware makers, is set to reap the rewards of the artificial-intelligence boom. The company believes it can win over $1 billion worth of orders for AI infrastructure from cloud providers in the 2025 fiscal year.
What does this mean for me?
As part of its earnings notes, Cisco said it has been flexible when working with the cloud providers who have been gearing up to be ready for the new AI wave.
A host of technology firms across the industry are preparing for what many are calling a new age in computing. Notwithstanding the after-hours move, Cisco shares have climbed 12% so far this year, trailing the S&P 500 index, which is up 17% over the same period.