LOS ANGELES - Cisco Systems Inc. (NASDAQ: NASDAQ:CSCO) has introduced a new AI server family and AI PODs designed to enhance enterprise AI infrastructure, leveraging NVIDIA (NASDAQ:NVDA) accelerated computing. The announcement was made during the Cisco Partner Summit on Tuesday, aiming to provide businesses with a scalable and adaptable approach to AI adoption.
The company unveiled the UCS C885A M8 servers, which are tailored for GPU-intensive AI workloads and utilize the NVIDIA HGX supercomputing platform with NVIDIA Tensor Core GPUs. These high-density servers are Cisco's first foray into a dedicated AI server lineup and are expected to ship by the end of this year.
In addition to the servers, Cisco is rolling out AI PODs, which are pre-configured infrastructure stacks for specific AI use cases and industries, set to be orderable in November 2024. These PODs combine compute, networking, storage, and cloud management to provide scalable and efficient AI solutions.
Cisco's AI Readiness Index indicates that while 89% of IT professionals plan to deploy AI workloads within the next two years, only 14% report their infrastructure is currently AI-ready. Cisco's new offerings are managed by Cisco Intersight, offering centralized control and automation to simplify configuration and daily operations.
The new solutions are part of Cisco's broader AI and data center infrastructure portfolio, which includes the recently introduced 800G Nexus switching platforms and the Nexus HyperFabric AI solution with NVIDIA.
Cisco's expansion into AI infrastructure is in response to the growing demand for scalable, secure, and programmable networks, as the rise of AI transforms data center requirements. With these innovations, Cisco aims to lower the barriers to AI adoption for enterprises, providing the necessary infrastructure to support the increasing computational demands of AI applications.
The press release also included statements from Cisco's partners, expressing excitement about the potential of these new AI platforms to drive business outcomes securely. Payment solutions are available for these products to help partners manage financial aspects such as balance sheet debt and cash flow.
This news article is based on a press release statement from Cisco Systems, Inc.
In other recent news, Cisco has announced a significant overhaul of its partner program, backed by an $80 million investment. The revamped Cisco 360 Partner Program, set to launch in February 2026, aims to better serve customer needs by modernizing infrastructure, managing AI workloads, and enhancing security and resilience. Cisco also introduced new AI solutions, including the Webex AI Agent, AI Agent Studio, and Cisco AI Assistant, expected to be available in Q1 2025, to improve customer service experiences.
The company reported Q4 2024 revenue of $13.6 billion, marking a 10% decline year-over-year. However, sectors such as Security and Observability saw significant growth, surging by 81% and 41% respectively. The acquisition of Splunk (NASDAQ:SPLK) contributed an additional $960 million to the quarter's revenue.
Cisco's stock was upgraded from Neutral to Buy by both Citi and HSBC. Citi's upgrade was based on potential growth in the Ethernet AI Total Addressable Market and a narrowing valuation gap with peers, while HSBC anticipates a compound annual growth rate of 11.6% in Cisco's non-GAAP earnings per share from 2024 through 2027.
In addition to these upgrades, Cisco announced a substantial investment in cloud services provider, Coreweave, valuing it at $23 billion. This move underscores the company's intent to expand its presence in this rapidly evolving sector. Lastly, Ekta Singh-Bushell will not seek re-election at the forthcoming annual stockholders meeting. These are all recent developments within the company.
InvestingPro Insights
Cisco's recent introduction of AI-focused server solutions aligns well with its strong market position and financial performance. According to InvestingPro data, Cisco boasts a substantial market capitalization of $222.68 billion, underlining its significance in the tech sector. This robust market presence is complemented by the company's solid financial metrics, including a revenue of $53.8 billion over the last twelve months.
InvestingPro Tips highlight Cisco's strength as a "prominent player in the Communications Equipment industry," which is particularly relevant given its new AI infrastructure offerings. The company's ability to innovate in high-demand areas like AI while maintaining financial stability is further evidenced by its moderate debt levels and consistent profitability.
Investors may find Cisco's dividend policy attractive, especially in light of its AI-driven growth potential. An InvestingPro Tip notes that Cisco "has raised its dividend for 14 consecutive years," with a current dividend yield of 2.89%. This commitment to shareholder returns, coupled with its push into AI infrastructure, could make Cisco an appealing option for both growth and income-focused investors.
For those interested in a deeper analysis, InvestingPro offers 10 additional tips for Cisco, providing a comprehensive view of the company's prospects in this evolving tech landscape.
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