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Investing.com -- UBS upgraded Cisco Systems to Buy from Neutral in a note on Monday, raising its price target for the stock to $88, citing a “multi-year growth cycle driven by AI infrastructure demand, a large-scale Campus refresh cycle, and momentum in Security.”
“We upgrade Cisco to Buy based on a multi-year growth cycle,” wrote UBS analyst David Vogt, highlighting surging AI infrastructure orders and improving demand across Cisco’s enterprise and security businesses.
According to UBS, Cisco has “secured more than $2 billion in AI orders in fiscal 2025, nearly all from hyperscalers,” with “two-thirds full systems running Silicon One.”
Enterprise and sovereign demand is also ramping, with orders “approaching $1 billion, up sharply from a couple hundred million dollars in the most recent quarter,” positioning the company for “sustained AI-fueled growth in FY26 and FY27.”
UBS also pointed to an accelerating campus refresh cycle as customers upgrade aging hardware.
The firm said Cisco’s installed base includes “tens of billions in aging Cat 4K/6K gear (5–15 years old),” adding that upgrades to “AI-enabled Smart Switches are expected to drive Campus growth from 5% in FY26 to roughly 7% in FY27.”
In security, UBS noted that “next-gen products like Hypershield are growing more than 20%, and Splunk integration is gaining traction.”
UBS Evidence Lab survey data is also said to have supported the bullish view, showing that 83% of respondents expect Cisco’s future sales to be “strong” or “very strong,” up from 71% previously.
UBS raised its 2027 earnings estimate to $4.62 per share from $4.34 and increased its valuation multiple to 19 times earnings, calling Cisco “a San FranCISCO treat” trading at a more than 20% discount to large-cap tech peers.