Bengaluru, India – Cisco Systems announced on Wednesday an increase in their annual revenue forecast, signaling a rise in demand for their products as they focus on cybersecurity, cloud systems, and AI-driven technology. This shift comes as companies invest more in AI technologies that require robust computing power, leading to a higher demand for data centers utilizing Cisco’s products like ethernet switches and routers.

CEO Chuck Robbins emphasized the importance of their portfolio in meeting the infrastructure needs for AI implementation. As a prominent supplier of networking equipment, Cisco plays a crucial role in connecting various devices within a local area network, including computers, laptops, routers, servers, and printers.

To streamline operations and concentrate investments in key areas like cybersecurity, Cisco underwent two rounds of layoffs this year. Additionally, the completion of their $28 billion acquisition of Splunk in March aimed to strengthen their software business amidst the AI surge and counteract a slowdown in demand post-pandemic by enhancing cybersecurity capabilities.

Revising their annual revenue projection to fall between $55.3 billion and $56.3 billion, up from the previous estimate of $55.0 billion to $56.2 billion, Cisco reported a 6% decline in revenue to $13.84 billion for the first quarter ending on Oct. 26. Despite the decrease, their adjusted profit per share of 91 cents surpassed expectations of 87 cents.

In a related development, rival Arista Networks recently forecasted fourth-quarter revenue above Wall Street estimates, indicating a competitive landscape in the sector. The ongoing investments in AI technologies and cybersecurity solutions are shaping the trajectory of companies like Cisco and Arista Networks as they navigate changing market demands.