Cisco, Miivo AI and Lenovo: The AI Revolution Reaches the Next Level of Profitability

Cisco: Share Slips Despite Strong Profit Growth

The appetite for AI is also evident in the latest figures from technology giant Cisco, which closed fiscal year 2026 with very positive results. For the full year, revenue rose to USD 63.3 billion. At the same time, net income rose by nearly a third to USD 13.3 billion.

The final quarter of the year saw particularly strong performance. During this period, revenue rose by 18% to over USD 17 billion, while profit increased by more than half year-over-year. This growth is driven by high demand for networking products and IT infrastructure. Above all, the expansion of data centers for artificial intelligence is generating a large number of orders. In the fourth quarter alone, major customers ordered related technology worth USD 4 billion. For the next fiscal year, management anticipates further revenue growth and projects total revenue exceeding USD 72 billion.

Despite these solid financial results, the financial markets reacted negatively. Following the presentation of the results, the share price fell by just under 9% to around USD 113. The reason for this decline is believed to be that investors had hoped for an even more optimistic forecast for future business with AI applications.

This caution is also reflected in analysts' current valuations. DZ Bank did raise the stock's fair value slightly to USD 124, but continues to recommend only holding the stock. The reasoning given was that, while demand for AI is rising, this growth is progressing too slowly relative to the stock's current high valuation. For existing shareholders, at least the announcement of a quarterly dividend of USD 0.42 is a positive development.

Miivo AI: Significant Growth Surge

Miivo AI picked up considerable momentum in the first half of 2026. Within just six months, the company launched three AI products and has already gained more than 3,000 users. At the same time, the average usage duration of subscribers increased significantly, while the base of recurring revenue customers was expanded. To support further growth, the development team was expanded, and a sales team focused on North America was established.

The focus is on business intelligence, AI lead generation, and reputation & customer insights. The solutions address specific challenges faced by small and medium-sized businesses (SMBs). For example, they analyze financial and operational data in real time, identify and engage potential B2B customers, and analyze reviews on Google, Instagram, and Reddit. Instead of a single complex platform, this creates a portfolio of specialized AI tools through which customers can gradually enter the Miivo ecosystem.

There are more than 400 million small and medium-sized businesses worldwide. Miivo aims to make features available to these SMBs that were previously often reserved for larger companies with corresponding IT budgets. The AI is integrated into existing workflows and is designed to increase productivity, automate processes, and enable better decision-making. This creates enormous economies of scale, as self-service, automated onboarding, and plug-and-play integrations are intended to keep support costs low, thereby enabling attractive margins.

Sales offer additional leverage. Miivo focuses on integration with existing SaaS platforms. One such integration has already been established with a regional accounting provider that serves more than 14,000 SMBs. Each additional partnership could thus create a new sales channel with comparatively low customer acquisition costs.

Following the development phase in 2025, 2026 is now providing the first indications of commercial acceptance. If the current user growth continues and the transition to recurring revenue is successful, the company, currently valued at approximately CAD 18.10 million, could be just at the beginning of its growth trajectory.

Lenovo Delivers Record Revenue and Surpasses Expectations

At the technology company Lenovo, the so-called "hybrid AI strategy", in which local devices collaborate with external servers, was particularly notable. Thanks to this technology, Lenovo achieved the highest quarterly revenue growth in the company's history. With total revenue of USD 26.9 billion, the company saw a 43% increase compared to the same period last year. Adjusted net income rose by 176% to USD 1.075 billion.

In addition to AI, other business segments also contributed to the growth. The Devices division generated USD 17.1 billion in revenue and posted 27% growth. In this segment, the company holds a global market share of 25.1% for computers with specialized artificial intelligence capabilities. Sales of tablets and smartphones also rose by 80% and 15%, respectively. The most significant relative increase was seen in the Infrastructure Solutions division, whose revenue nearly doubled, rising 98% to USD 8.5 billion. The company is seeing sustained high demand for servers in this segment. To further expand its market presence, Lenovo also increased its research and development spending by 30% to USD 682 million.

Analysts at Bank of America revised their assessment of Lenovo shares, changing the rating from "Neutral" to "Buy". They also raised the price target from USD 67.20 to USD 117.69. This is because the figures significantly exceeded the bank's forecast. Reported revenue was 20 to 22% above expectations, while adjusted earnings exceeded forecasts by 56 to 68%. The primary reasons cited for the upgrade were the above-average sales figures and the overall business performance in the server division.

The AI boom is shifting from vision to operational business. Cisco is already benefiting from infrastructure contracts worth billions, while Lenovo is shattering expectations with record growth in servers and AI devices. If Miivo AI succeeds in converting its strong user growth into recurring revenue and attracting additional distribution partners, its low valuation could still offer ample upside potential, given that there are over 400 million SMBs worldwide.