Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Thursday, JPMorgan analyst Samik Chatterjee increased the price target for Cisco Systems Inc (NASDAQ:CSCO) to $73.00, up from the previous $70.00, while maintaining an Overweight rating on the stock. Chatterjee’s decision follows Cisco’s reported results and guidance which suggest resilience in Enterprise IT Infrastructure spending amid a challenging macroeconomic climate.
Cisco’s recent performance has been bolstered by a reversal in tariffs and sustained demand for key IT infrastructure from Enterprises and Hyperscalers. A particular highlight was the company’s announcement of $600 million in AI orders in the third fiscal quarter, positioning it ahead of its $1 billion AI order target for the year, with a total of $1.3 billion after F3Q and one quarter remaining.
The company’s involvement with HUMAIN in Saudi Arabia, a project aimed at meeting AI build-out aspirations, further solidifies Cisco’s significant role in AI infrastructure developments. These factors are expected to increase investor confidence in Cisco’s growth sustainability, especially after the company raised its growth expectations for FY25 to over 5%, reflecting strong momentum in F3Q and the first three fiscal quarters of FY25.
The recent tariff announcements earlier in the week have also alleviated some concerns about a potential macroeconomic slowdown, enhancing the outlook for Cisco’s stock. The analyst anticipates a favorable investor response to Cisco’s execution against targets set during the last analyst day, which may lead to a re-rating of the shares.
In light of the raised guidance, JPMorgan has revised its revenue and earnings outlook for FY25. The firm also anticipates continued resilient spending from Enterprises and stronger demand for AI products than previously expected, leading to increased revenue growth projections for FY26 and FY27. Despite these positive revisions, the firm remains cautious about margin trajectories, factoring in the possibility of tariff increases following the current pause on reciprocal tariffs.
The revised December 2025 price target of $73 reflects JPMorgan’s higher earnings and revenue estimates for Cisco, taking into account the company’s robust growth drivers, particularly in Security and Networking, and the potential impact of next-generation Catalyst products on Campus Networking.
In other recent news, Cisco Systems Inc. reported its third-quarter earnings for 2025, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.96, exceeding the forecasted $0.92, and reported a revenue of $14.1 billion, slightly above the anticipated $14.04 billion. Cisco’s revenue grew by 11% year-over-year, with significant contributions from its product revenue, which increased by 15% to $10.4 billion. Services revenue also saw a 3% rise, totaling $3.8 billion. Notably, Cisco’s subscription revenue, accounting for 56% of total revenue, reached $7.9 billion.
In addition to its earnings announcement, Cisco continues to focus on AI infrastructure, with orders surpassing $1 billion. The company also highlighted its strategic partnerships and innovations in AI and quantum networking as key factors in its robust performance. Cisco provided guidance for the next quarter, forecasting revenue between $14.5 billion and $14.7 billion, with a non-GAAP EPS of $0.96 to $0.98. The company anticipates continued growth in AI infrastructure and enterprise AI adoption.
Meanwhile, Cisco’s stock has seen positive reactions from analysts, with the company receiving favorable assessments from firms like Morgan Stanley (NYSE:MS). Additionally, Cisco announced an expanded collaboration with NVIDIA (NASDAQ:NVDA), aiming to enhance its AI capabilities and offerings. The company also highlighted its recent investment program in Saudi Arabia, aligning with the country’s Vision 2030 initiative.
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