Cisco’s AI Efforts Magnify These ETFs

Shares of Cisco Systems (CSCO) rallied Thursday after the networking gear maker delivered April-quarter results that beat Wall Street estimates. More importantly, the technology company boosted its 2026 guidance, due in part to strength in artificial intelligence (AI) orders.

California-based Cisco now expects AI revenue of $4 billion this year, up from a prior estimate of $3 billion, and AI orders of $9 billion, up from the previously forecast $5 billion. From those forecasts, it can be inferred that the Direxion Daily CSCO 2X Bull Shares (CSCL) and the Direxion Daily CSCO Bear 1X Shares (CSCS) could be useful to tactical traders at various points over the remainder of 2026.

CSCL attempts to deliver 200% of the daily performance of Cisco shares while the bearish CSCS seeks daily returns corresponding to the inverse of the underlying stock’s performance. So if Cisco stock falls by 1% on a given day, the inverse ETF should rise by a similar amount.

Both Cisco ETFs Could Have Days in the Sun

Cisco has clear AI ties, explaining the ebullience surrounding the April-quarter results and the increased 2026 guidance. However, some market observers believe the stock is now overvalued. That indicates that any missteps on the AI front could stoke a pullback. That scenario isn’t guaranteed to materialize, but if it does, traders could make use of CSCS.

On the other hand, there’s no denying Cisco is making AI strides. Its status as a mature technology company may appeal to a broad swath of investors. That could introduce opportunity with the bullish CSCL.

“Cisco’s artificial intelligence growth is impressive, as it benefits from a large available supply and a strong portfolio between classic networking and optics. We see the firm as well-positioned in hyperscale cloud and AI model builders, as well as in sovereign AI buildouts and neoclouds,” observed Morningstar’s William Kerwin.

Cisco’s status as an antidote for some crucial AI bottlenecks could bolster the case for occasional CSCL deployment this year.

“Networking is a critical enabler of, and bottleneck to, AI model performance. This leads to high spending on AI network infrastructure that supports growth for Cisco and its peers. We expect this trend to continue powerfully over the next five years,” added Kerwin.

For traders eyeballing CSCL and CSCS, the marquee issue will be Cisco’s ability to, at a minimum, meet AI expectations.

“As a conservative guide, Cisco’s AI guidance has risen each quarter this year. We model $8 billion in fiscal 2027 (versus management’s $6 billion guide), rising to $19 billion at the end of the decade, implying 79% annualized growth from fiscal 2025,” concluded Kerwin.

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