The CEO of networking equipment manufacturer Cisco Systems sought to ease concerns about slowing growth following a poor annual revenue projection by highlighting market share gains and potential presented by artificial intelligence (AI).

The comments assisted the company’s shares in reversing direction in late-day trading on Wednesday, resulting in a gain of more than 2%. However, despite an 11% climb this year, the stock has underperformed a market-wide uptrend due to concerns that a slowdown in cloud expenditure might affect orders.

In comparison to Refinitiv’s projection of $58.38 billion, Cisco projected full-year sales to be between $57 billion and $58.20 billion. Last month, rival Juniper also provided a bleak outlook.

However, Cisco CEO Chuck Robbins stated that the firm intends to continue growing its market share in its three major networking markets, where it gained more than 3 percentage points in the first quarter.

He added that the business was probably going to be a major provider of the networking hardware required for AI workloads. “Cisco has a huge opportunity here.”

Major cloud service providers, including Microsoft, recently announced plans to spend more on the servers that power their AI services, which might be good news for companies that make switches and routers and other networking hardware.

The telecom company AT&T and the auto retailer AutoNation are among Cisco’s clients. Cisco also reported fourth-quarter revenue of $15.20 billion, exceeding the estimate of $15.05 billion.

The business, which stands to gain from the lowered supply chain barriers, has attempted to lessen its reliance on expensive one-time hardware sales by promoting more of its software services, which are more dependable because they generate recurring revenue.

Compared to analysts’ forecasts of $1.06 per share, its adjusted quarterly profit was $1.14 per share.

Compared to the forecast of $4.04, Cisco anticipates adjusted profits per share of $4.01 to $4.08 for the entire year.

(Adapted from FlipBoard.com)