Cisco and Applied Materials Earnings: What's at Stake
Cisco reports Wednesday with EPS seen +18% YoY; Applied Materials follows Thursday. AI infrastructure demand and Singapore capacity are the key variables.
Key Points
- Cisco is expected to report fiscal Q4 EPS of $1.17, up 18.2% year-over-year, on revenue of $16.83 billion, up 14.7%, when it reports after Wednesday's closing bell.
- Applied Materials faces consensus estimates of $3.39 EPS (+36.7% YoY) on $9.01 billion in revenue (+23.4% YoY) for fiscal Q3, with analysts flagging Q4 estimates as potentially conservative given the Singapore facility ramp.
- Both prints land inside a week where July CPI data could reprice rate expectations and alter the multiple traders are willing to assign to high-growth tech names.
Two of the largest infrastructure plays in technology report this week, and the stakes are straightforward: Cisco's Wednesday print will tell traders whether AI-driven networking demand held through June, while Applied Materials' Thursday result either validates or challenges the thesis that semiconductor equipment spending is re-accelerating into the back half of 2026. With FactSet projecting S&P 500 Q2 earnings growth of 47.4% — the highest reading since Q2 2021 — the bar is elevated, and the macro backdrop heading into both prints is anything but settled.
Cisco: AI Networking Demand in the Dock
The Street wants $1.17 in fiscal Q4 EPS from Cisco, up 18.2% from the $0.99 reported in the year-ago quarter, on revenue of $16.83 billion — a 14.7% year-over-year increase. Those are not conservative numbers. For context, Cisco spent the better part of 2024 and early 2025 working through an inventory digestion cycle that compressed revenue and created a low base. The comparisons are now favorable, but favorable comparisons only pay off if real demand is showing up in Product orders, and that's the number traders need to watch Wednesday evening, not the headline revenue figure.
Industry checks conducted ahead of the print indicate AI infrastructure spending accelerated during the April-through-June period. The specific driver is the buildout of GPU clusters and the high-speed interconnect fabric required to make those clusters functional at scale — Cisco's Networking segment is the primary beneficiary of that spending cycle. Hyperscaler capital expenditure budgets, which have already been flagged by Microsoft, Google, and Amazon as expanding in their own recent reports, flow downstream into Cisco's order book with a lag of roughly two to three quarters. If Q2 hyperscaler capex was genuinely strong, Cisco's Q4 fiscal result should show it in Product order momentum, and more importantly, the fiscal Q1 2027 outlook provided on the call will reflect whether that momentum is sustaining.
The secondary variable is Splunk integration. Cisco closed its $28 billion acquisition of Splunk in March 2024, and by fiscal Q4 2026, the combined entity should be showing meaningful cross-sell traction. Analysts will probe management on whether Splunk's security and observability portfolio is converting existing Cisco networking customers at the expected rate, or whether the enterprise sales cycle is running longer than modeled. Any upward revision to Splunk revenue contribution in the fiscal 2027 guide would be a positive surprise, given that the original synergy timeline was conservative by design.
Applied Materials: Singapore Is the Wild Card
Applied Materials faces a steeper implied growth rate than Cisco — 36.7% EPS growth and 23.4% revenue growth year-over-year for fiscal Q3 — which reflects both the cyclical recovery in semiconductor capital equipment spending and the company's specific execution on capacity expansion. The Singapore facility, which began ramping in June, is the single most important operational variable heading into Thursday's print.
Semiconductor equipment manufacturing is capacity-constrained at the top of a demand cycle, and Applied has been explicit about Singapore as the incremental supply response. The facility started ramping in June, which means it contributed only partial-quarter output to fiscal Q3 results — the period ending in late July. The full-quarter benefit lands in fiscal Q4, which is why analysts are already flagging Q4 consensus estimates as potentially conservative. Applied Materials' investor communications have been careful not to pre-announce Singapore output volumes, which means Thursday's call will be the first clean read on actual ramp rates versus the internal targets management communicated earlier this year.
The demand side of the AMAT equation is anchored in leading-edge logic and advanced packaging. TSMC's N2 ramp, Samsung's foundry recovery, and Intel's continued 18A process investment all require Applied's deposition and etch equipment in volume. The 10-year Treasury yield at 4.69% does create a headwind for the semiconductor equipment group on a multiple basis — these stocks trade at 20-to-25 times forward earnings, and every 25 basis points of rate movement compresses that multiple mechanically. But multiple compression is a different problem than earnings compression, and at +36.7% YoY EPS growth, AMAT has significant cushion before the earnings story breaks.
The Macro Overlay That Could Move Both Prints
Neither Cisco nor Applied Materials operates in a vacuum this week. July CPI data lands before either company reports, and with markets currently pricing a 44% probability of a September Fed rate hike — down sharply from 67% a week ago following an unexpectedly weak July jobs report — any inflation surprise changes the calculus for high-multiple technology names. Core CPI was running at 2.6% year-over-year as of June, and the Fed's tolerance for keeping rates elevated at 3.63% depends heavily on whether that trend is continuing to decelerate or showing signs of re-acceleration.
A hot CPI print — say, core coming in at 2.9% or above — would likely push the September hike probability back above 60% and create an immediate multiple headwind for both CSCO and AMAT heading into their respective reports. Conversely, an in-line or softer print would reinforce the current rate-cut narrative and provide the valuation support that makes strong earnings translate into meaningful stock gains rather than "sell the news" reactions. The interaction between CPI timing and earnings timing this week is not coincidental — traders need to hold both variables in mind simultaneously.
The broader earnings season context matters too. With FactSet projecting 47.4% S&P 500 Q2 earnings growth — a level not seen since Q2 2021, when pandemic base effects were doing heavy lifting — the credibility of that aggregate number depends on whether megacap technology companies deliver at scale. Cisco at $16.83 billion in quarterly revenue and Applied Materials at $9.01 billion are not small contributors to that aggregate. If both beat and guide higher, the 47.4% figure gets cemented and provides fundamental support for the Nasdaq's recent 1.30% outperformance. If either misses materially, the earnings season narrative fractures heading into the August 15 expiration cycle, where options positioning in both names is likely to amplify any gap at the open. The specific level to watch for CSCO is the $64 area, which has served as technical support through the past two earnings cycles; a miss that breaks that level on volume would signal something more than a single-quarter stumble.
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