Narrow-moat Cisco (CSCO) posted 5% year-over-year growth in its second quarter as revenue rose to $12.5 billion. Excluding the divested service provider video business, Cisco grew by 7%, which was in line with our expectations. We are excited to see our long-term thesis, that Cisco's all-encompassing portfolio is attractive and can make it a one-stop shop, is playing out. Cisco in interweaving its high-growth technologies and software focus into a congruent portfolio, and we believe the company can continue its growth streak while gaining operating leverage from selling more software and services. For these reasons, we are increasing our fair value estimate to $49 per share from $46. With shares trading around our fair value estimate, we recommend shareholders hold their position in this security.
Excluding the service provider video business, infrastructure platforms grew by 6%, applications by 24%, security by 18%, and services by 1%, compared with the prior year. The switching and wireless businesses both grew by double digits due to the campus market's uptick of Catalyst 9000 products along with strong Wave 2 and Meraki wireless product sales. The routing business was a headwind due to service providers. Applications exceeded our expectations as AppDynamic's application monitoring and telepresence products garnered strong demand. Security sales boomed as customers are demanding more advanced threat protection, holistic security offerings, and more protection for end users.
Cisco guided 4%-6% sales growth and $0.63-$0.68 EPS for the third quarter. Management projects non-GAAP gross margin to increase slightly at the midpoint, and for non-GAAP operating margin to be consistent with the previous year. We model Cisco slightly exceeding its earnings targets and for revenue to be on the high side of guidance. Cisco announced a 6%, or $0.02 per share, dividend increase for next quarter alongside proclaiming an additional $15 billion authorized for share repurchases.
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Mark Cash does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.