Cisco (CSCO) delivered a strong Q1 FY26, beating revenue and EPS guidance and announcing accelerating AI infrastructure orders. The stock jumped over 7% after hours to $79.47, breaking above a multi-quarter resistance zone and pushing toward levels not seen since the 1999 tech-bubble highs. The market reaction was driven by stronger-than-expected order growth, AI traction, and bullish management tone.

1. Fundamental Drivers Behind the Breakout

Earnings Beat

Revenue: $14.9B (+8% YoY) — above guidance
Non-GAAP EPS: $1.00 (+10% YoY) — above high end of guidance
Gross Margin: 68.1% (non-GAAP) — above expectations
Operating Margin: 34.4% (non-GAAP) — strong leverage
GAAP opex down 6% YoY — cost discipline intact

Order Strength (Most Important Factor)

Product orders +13% YoY
5th straight quarter of double-digit networking order growth
AI Infrastructure orders: $1.3B from hyperscalers, a major acceleration

Management Tone (Market-Moving Quotes)

“On track to deliver our strongest year yet.”
“Widespread demand for our technologies… unlocking AI.”
“AI relevance continues to build.”
“Multi-year, multi-billion campus refresh cycle underway.”

Guidance

Q2 EPS: $1.01–1.03
FY26 revenue: $60.2B–61.0B
Guidance shows stability despite tariff headwinds.

2. Technical Analysis

Long-Term Trend (3-Year Chart)

Clear multi-year uptrend: higher highs + higher lows.
Stock has fully exited the 2022–2024 consolidation range.
Breakout now targets levels last seen during 1999 tech bubble.

Intermediate Trend (6-Month Chart)

Ascending channel intact from mid-2025.
Earnings reaction broke the upper boundary of the channel → trend acceleration.
Price is firmly above:
- 50-day SMA ($69.33)
- 200-day SMA ($65.12)
  Both upward-sloping → strong demand trend.

Short-Term (3-Month Chart)

A clear cup-and-handle pattern completed.
Handle formed at $69–72; earnings breakout cleared $74 resistance.
The breakout is confirmed with high volume and gap-up price action.

Momentum Indicators

RSI rising toward 65–70, bullish but not overbought → room to run.
ADX now rising into trend-strength zone (~20) → confirms trend acceleration.
Williams %R shows momentum buyers in control.

3. Key Levels Going Forward

Post-Earnings Support

$74 — former resistance, now key support
$70 — 50-day SMA; strong retest zone
$65 — 200-day SMA (major trend support)

Near-Term Resistance

$82–84 — 2021/2022 highs & major historical supply
Above $84: very little resistance until $89–92 (approaching 1999 zone)

Breakout Target Projections

Using the cup-and-handle breakout + prior channel:

Primary target: $82–84
Extended target: $86–88
Stretch target: $92+ if AI order growth persists

4. Competitors to Watch

Core networking + security peers:
ANET, JNPR, HPE, DELL, FTNT, PANW

ANET is the closest AI-networking comp; Cisco’s $1.3B AI order figure directly competes with Arista.

5. Why CSCO’s Move Matters

Cisco hasn’t traded near these levels since the late 1990s/tech-bubble era, and this is the first time since then that fundamental + narrative + AI tailwinds all align at once.

The market is now beginning to price Cisco as:

part networking,
part security,
part AI-infrastructure provider.

This is new — and is the reason for the magnitude of the move.

6. Overall Outlook

Bullish trend continuation.
Breakout on earnings + strong AI order book + multi-year refresh cycle = sustained upward bias.

Base case:
→ March toward $82–84

Bull case:
→ $86–88 on continued AI order momentum

Risk case:
→ Breakdown only if price closes below $73 (invalidates breakout)

Disclaimer: This information is for educational purposes only and is not financial advice. Always do your own research or consult a licensed professional before making investment decisions.