Cisco Systems (CSCO) stock delivered a significant 57.3% return over the year ending October 28, 2026, substantially outperforming the S&P 500's 14.0% gain. This rally was driven by management reporting a substantial jump in orders for its AI networking gear from major cloud companies. Although early guidance in late 2024 set a modest $1 billion target for fiscal 2025, subsequent filings revealed that this initial figure represented only a small fraction of Cisco's total $56.7 billion revenue for that year. By the end of fiscal 2026, AI infrastructure from these largest cloud customers accounted for approximately 6% of Cisco's total revenue, up from less than 2% in the prior fiscal year. The networking business, which constitutes more than half of Cisco's sales, grew 22.5% in fiscal 2026 after a contraction the previous year. Consequently, investors increased their valuation multiple on Cisco, with the price-to-sales ratio rising from 4.8 to 6.7 between September 2025 and September 2026. Recent data confirms that AI orders continue to accelerate. In the quarter ended July 2026, orders from top cloud customers reached $4 billion, more than doubling from the prior year, while total fiscal 2026 AI infrastructure orders totaled $9.3 billion. This surge contributed to a pick-up in overall sales growth, which accelerated from 7.5% in the quarter ended October 2025 to 17.6% in the quarter ended July 2026. Management has guided for $7.5 billion of AI infrastructure revenue from these customers in fiscal 2027. Despite the strong performance and rising stock price, Cisco shares have recently lagged the broader market, losing 2.5% from late July to October 28, 2026, while the S&P 500 gained 4.4%. This recent decline occurred even after a sharp 8.4% drop on August 13 as investors weighed potential pressure on gross margins. Management notes that orders are large and uneven, often placed well in advance, making upcoming November 2026 results a key figure to watch for continued order updates.