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Investing.com - UBS upgraded Cisco (NASDAQ:CSCO) from Neutral to Buy and raised its price target to $88.00 from $74.00, citing multiple growth drivers.
The upgrade is based on UBS’s view of a multi-year growth cycle for Cisco driven by artificial intelligence infrastructure demand, a large-scale campus refresh cycle, and momentum in the company’s security business.
Cisco secured over $2 billion in AI orders in fiscal year 2025, with most coming from hyperscalers, while enterprise AI orders are approaching $1 billion, positioning the company for continued AI-fueled growth in fiscal years 2026 and 2027.
UBS notes Cisco’s installed base includes tens of billions in aging network equipment that is 5-15 years old, with upgrades to AI-enabled Smart Switches expected to drive campus growth from 5% in FY26 to approximately 7% in FY27.
The firm also highlighted Cisco’s security portfolio improvements, with next-generation products like Hypershield growing over 20% and Splunk integration gaining traction.
In other recent news, Cisco unveiled its new 8223 routing system, designed to connect data centers handling artificial intelligence workloads. This system offers 51.2 terabits per second of Ethernet routing capacity and is powered by the newly announced Silicon One P200 chip, which aims to enhance bandwidth scalability. Additionally, Cisco announced a new data center switch series incorporating NVIDIA’s Spectrum-X Ethernet technology, set to be available for order by the end of the year. In collaboration with Pure Storage, Cisco launched a FlashStack Cisco Validated Design as part of the Cisco Secure AI Factory, integrating various technologies to aid enterprises in scaling AI deployments.
Moreover, Cisco partnered with the City of Los Angeles to introduce a free public Wi-Fi network along the Crenshaw Corridor, enhancing internet accessibility for local residents and businesses. The company also made headlines with its new chip technology, challenging Broadcom’s position in AI networking by facilitating faster data transfers across AI data centers. These developments highlight Cisco’s strategic focus on AI and networking solutions, as the company continues to innovate in these sectors.
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