"Solutions companies get higher margins and this is the beginning of a higher margin cycle."
(Related: Cisco May Be Signal for Sector: Pro)
The company was early to see the economic downturn, Cramer explained, and now they foresee an upturn. "They have seen the downturn, this is them taking share, they've gotten out of some businesses that aren't that good. The gross margins are good," he said.
"This is what the beginning of a sustained move looks like. I don't know if they can sustain it, but it is what they look like."
Cisco on Wednesday reported a surprise beat in earnings and revenue in the fiscal third-quarter, suggesting the networking-gear maker's customers are spending more on technology.
"We are starting to see some good signs in the U.S. and other parts of the world which are encouraging," Chambers said in the earnings release, calling the economic landscape "slow but steady."
(Read M—ore: Cisco Stock Jumps on Surprise Earnings Beat)
With a mix of good commentary and price target raises from analysts, Cisco seems to be bucking relatively bearish analysis put out prior to earnings, Cramer said.
He pointed to a research report by JPMorgan that issued a "sell" rating on Cisco stock, which was part of setting low expectations for the quarter. Cramer broke down the assumptions in the report: "Enterprise weakness continuing in 2013? Wrong. There was no enterprise weakness. Macro headwinds? Wrong. John Chambers is saying those macro headwinds have died down. Shares vulnerable? Shares were not vulnerable."
"I've had my ups and downs with John (Chambers) but right now it's pretty good," Cramer added. "He's up, so I praise him."
