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Investing.com - Melius Research raised its price target on Cisco (NASDAQ:CSCO) to $100 from $84 while maintaining a Buy rating, citing strong execution in the company’s networking segment. The new target represents significant upside from Cisco’s current price of $73.96, which is already trading within 1% of its 52-week high of $74.84.
The networking business is more than offsetting slowness in Cisco’s security segment, which declined 2% year-over-year, according to Melius. The firm noted that networking has an artificial intelligence component in optics and silicon, with AI orders from hyperscalers accelerating to $1.3 billion, up 60% quarter-over-quarter. This AI-driven growth is contributing to Cisco’s overall revenue growth of 8.91% over the last twelve months.
Overall orders accelerated 600 basis points quarter-over-quarter to 13% year-over-year growth, or 9% excluding hyperscalers. All networking technologies within campus environments—including switching, routing, wireless, and IoT—experienced accelerated order growth.
Melius highlighted that Cisco’s new smart switches, secure routers, and Wi-Fi 7 products are ramping faster than previous product launches. The firm believes this networking momentum can continue due to clear secular tailwinds as Cisco executes a product refresh while gaining relevance in Sovereign AI.
The price target increase follows Cisco beating expectations and raising guidance, which Melius attributed to networking product cycles and AI more than offsetting weakness in the security business.
In other recent news, Cisco reported first-quarter fiscal 2026 earnings per share of $1.00, surpassing Goldman Sachs’ estimate of $0.99 and the company’s guidance range of $0.97-$0.99. This performance was primarily driven by a 15% year-over-year growth in the Networking segment. KeyBanc raised its price target for Cisco to $87 from $77, citing stronger-than-expected revenue and operating income margins, largely due to the strength in networking. Similarly, Morgan Stanley increased its price target to $82 from $77, highlighting the company’s better-than-expected performance in its key growth drivers, particularly in artificial intelligence (AI). BofA Securities also raised its price target to $95 from $85, maintaining a Buy rating and noting strong orders in AI networking and campus refresh demand. Cisco’s AI revenue target for fiscal year 2026 has been increased to $3 billion, up from $1 billion in 2025, reflecting significant growth in this area. William Blair reiterated its rating on Cisco, emphasizing a positive AI outlook for the fiscal year. These developments reflect a strong momentum in Cisco’s business, driven by its networking and AI segments.
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