Cisco Systems CEO Chuck Robbins said the technology industry is entering a "networking supercycle" fueled by unprecedented demand for artificial intelligence [1].
This shift signals a massive infrastructure overhaul as companies race to build the hardware necessary to support generative AI. The trend is driving record orders for hyperscalers and AI-specific networking equipment, altering the growth trajectory for the San Jose-based company.
Shares of Cisco rose between 13% [1] and 17% [3] on Thursday, May 14, after the company reported its fiscal third-quarter earnings. The stock surge followed news that Cisco beat its guidance for AI infrastructure and hyperscaler orders [1].
"We are entering a networking supercycle, driven by unprecedented AI demand," Robbins said in an interview with CNBC [1].
Despite the growth in AI orders, the company is restructuring its workforce. Cisco announced it will fire approximately 4,000 employees [2].
Robbins said that the surge in demand for AI tools and equipment is propelling the entire industry forward [3]. He said that AI infrastructure and hyperscaler orders have already exceeded the company's guidance for the fiscal year [2].
This combination of record-breaking stock performance and significant layoffs reflects a broader trend in the tech sector — companies are aggressively pivoting toward AI while trimming legacy operations to maintain efficiency.
"The demand for AI tools and equipment is propelling the industry forward," Robbins said [3].
“"We are entering a networking supercycle, driven by unprecedented AI demand."”
The 'networking supercycle' suggests that AI is not just a software boom but a hardware necessity, requiring a total replacement of existing network architectures to handle massive data loads. By firing 4,000 employees while seeing a stock surge, Cisco is signaling a transition from traditional networking services to an AI-centric business model, prioritizing high-growth infrastructure over legacy staffing.
