I would say underrated at the time, and definitely underrated today by historians of the war. I'd made a
post about the role of cavalry in the war on Reddit a month ago, and it gives some idea of how cavalry contributed during the war:
Cavalry exploitation secured final victory over the Central Powers in 4 theatres: Salonika, Palestine, Mesopotamia and Italy. A French Cavalry Brigade exploited the breakthrough at Dobro Pole and captured the former 11th Army headquarters at Uskub, severing the retreat of the German 11th and Bulgarian 1st Armies. In Palestine, the Desert Mounted Corps under Henry Chauvel made the most rapid advance in modern warfare, overwhelming Turkish rearguards and capturing Damascus, while the brigades of the former Indian Cavalry Division helped to capture Baghdad and even defeated Turkish troops on one occasion in trenches, netting 1000 prisoners. After Vittorio Veneto's initial successes, the Italian Cavalry Corps cut off the retreat of the Austro-Hungarians, with attacks combining cavalry, horse artillery, portee artillery on trucks, armoured cars and Bersaglieri light infantry. By that point, the French Cavalry Brigade and the Serbian Cavalry Division had reached the Danube River in Serbia. The French and British were poised for similar feats, with the French 2nd and British Cavalry Corps operating behind German lines just prior to the Armistice, and the French 1st Cavalry Corps awaiting the Alsace Offensive that never came.
Other successes include the defensive actions of the French Cavalry Corps against the Spring Offensives in 1918, and the exploitation of the Brusilov Offensive especially by the Russian 2nd and 4th Cavalry Corps along the Stryi and Stokhod Rivers, in 1916. Germany's Cavalry Corps Schmettow captured key crossings over the Olt River in Romania that same year, and harassed the Romanians flank, while earlier in 1915 Cavalry Corps Frommel and Garnier operated to great effect in Lithuania, capturing Kovno and Vilna respectively, and in the latter corps' case raided deep into the Russian rear at Molodetchno. In 1914 German Cavalry nearly out flanked Smith Dorrien at Le Cateau, but tired horses and Sordet's 2nd French Cavalry Corps prevented 2nd German Cavalry Corps from capitalizng . It did maul the 4th Infantry Division however, despite being outnumbered. The German 1st and 2nd Cavalry Corps screened the retreat from the Marne, and both sides cavalry fought with distinction in the Race to the Sea. Austro-German Cavalry screened the area between the German southern and Austrian northern flank around Krakow in October, and contributed to the defensive victory at Lipanov Limanowa. Further North, German cavalry got through the Russian Cavalry screen west of Lodz and could have encircled the Siberian Corps, but mud delayed them. They then took part in the Battle of Lodz, both in the encirclement and subsequent break out. Finally, the British Cavalry corps transformed the initial 5000 yard advance at Amiens into a 10 000 gain, and later captured crossings over the Celles River on October 9th 1918, advancing 14 km on a 5 km front.
It also should be noted that the machine gun was just as often the Cavalry man's friend as his enemy, not to unlike the relationship between infantry and machine guns. The machine guns of the German cavalry and their Jaegers were of great value in the fighting of 1914, particularly at Le Cateau, while the British Cavalry made effective use of their Vickers and Hotchkiss guns on numerous occasions in the war (indeed the light weight Vickers wad adopted to replace the Maxim with cavalry usage partly in mind!). Examples include the capture of Villers Faucon in 1917 during the pursuit to the Hindenburg Line, where British Cavalry charged the village while covered on their flank by machine gunners and armoured car machine gunners, a maneuver straight out of the cavalry training manual. The machine gunners of King Edwards Horse distinguished themselves at Pilckem Ridge, during the opening of 3rd Ypres, as did the gunners of Hodson's Horse at Cambrai and the 7th Dragoons and 20th Deccan Horse at Bazentin Ridge during the Somme. During the fighting along the Stokhod in June 1916, a regiment of Transbaikal Cossacks ambushed a Hungarian infantry regiment in the village of Galuziia, showering it with machine gun fire and then charging from the flanks. Machine gunners of the French 40th Corps Cavalry Regiment aided in the capture of a number of defends villages, during the French advance of August-September 1918.
When able to see action, the cavalry of WWI performed no worse than the infantry or artillery. On the Western Front, even with trench warfare, communications and command and control were largely what held it back, that and pre-war skepticism about it's future on account of the Infantrymen that dominated the officer corps of both sides.
On the Eastern Front and in the Middle East, where force ratios weren't as high as in the West, it was possible for Cavalry to penetrate weak points in the lines and to operate tactically in large units such as divisions and corps. Things were different on the Western Front, but the point that David Kenyon and Stephen Badsey have made in their writings on the British Cavalry in WWI (their theses are available online,
here and
here), is that communications and command and control were the biggest obstacles. Ideally, French and British cavalry divisions might have seen more use 1915-1917 had they been incorporated into battle plans differently. Holding them to the rear in their Cavalry Corps essentially wrote them out of battle; assigning the divisions to individual army corps, and having the brigades cooperate with the infantry divisions and with the divisional squadrons and corps regiments of cavalry, would have enabled them to be closer to the front and better able to exercise initiative in seizing fleeting opportunities. This was done at Amiens in August 1918, with the result (as I state above) that the depth of the advance was doubled, and the Old Frontline of the Somme Battlefield was brought within reach.
@Commando Howiezter