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Investing.com - Morgan Stanley has raised its price target on Cisco (NASDAQ:CSCO) to $82.00 from $77.00 while maintaining an Overweight rating on the stock. The networking giant is currently trading at $73.96, just shy of its 52-week high of $74.84, with shares having gained 28.15% year-to-date. According to InvestingPro data, the stock appears to be trading above its Fair Value.
The investment bank cited better-than-expected performance in two of Cisco’s three key growth drivers, with artificial intelligence (AI) growth potential exceeding expectations.
Morgan Stanley noted that Cisco reported $1.2 billion in AI orders, surpassing the $1 billion threshold that the firm had previously identified as a positive catalyst.
Cisco now expects approximately $3 billion in revenue from AI in fiscal year 2026, representing growth from about 2% of the company’s business to almost 5% in a couple of years.
The firm believes Cisco’s AI business combined with a healthy campus upgrade cycle creates potential for stock rerating, especially if sovereign opportunity becomes more significant over the next year.
In other recent news, Cisco Systems Inc. reported its fiscal first-quarter results for 2026, surpassing earnings expectations. The company achieved earnings per share of $1, exceeding the forecast of $0.98, and delivered a revenue of $14.9 billion, which was higher than the anticipated $14.77 billion. These results indicate a positive start to the fiscal year for Cisco. In addition, BofA Securities raised its price target for Cisco from $85 to $95, maintaining a Buy rating. This adjustment reflects strong orders for AI networking and increased demand for campus refreshes. BofA also noted Cisco’s ambitious $3 billion fiscal year 2026 AI revenue target, up from $1 billion in 2025. These developments highlight Cisco’s growth prospects in the AI networking sector.
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