Cisco Stock Declines Despite Strong Q4 Earnings and $0.42 Dividend

Cisco Systems reported fiscal fourth-quarter results that beat guidance on both lines, and CSCO fell anyway. Revenue hit a record $17.3 billion, up 18% year over year, with non-GAAP earnings per share of $1.22, up 23%. AI infrastructure orders were $4 billion in the quarter and $9.3 billion for all of fiscal 2026, and management guided AI infrastructure revenue to roughly $7.5 billion in fiscal 2027 from about $4 billion in fiscal 2026.

The stock still slid about 4.6% in after-hours trading, to roughly $118. The pressure point was gross margin, not demand. Cisco guided first-quarter fiscal 2027 non-GAAP gross margin to 65% to 66%, below the 66.3% delivered in the fourth quarter and well under the 68.4% posted a year earlier, with management pointing to a heavier hardware mix as AI systems become a larger share of the revenue base.

Cisco also declared a quarterly dividend of $0.42 per share, confirmed August 12, payable October 21 to shareholders of record on October 2 .

That combination is the story worth watching: AI orders are converting into hardware volume, and hardware carries lower margin than the software and subscription mix investors had been paying up for. The question into fiscal 2027 is whether AI revenue scale offsets the mix shift, or whether margin compression keeps capping the multiple even as the top line accelerates.

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