Cisco Surges 4.25% as Analysts Bet Big on AI-Driven Growth

On October 16, Cisco Systems (CSCO) rose by 4.25%, reaching its highest intraday price since September 2023. This significant movement is in response to strong endorsements from major financial analysts who see new opportunities for the tech giant, particularly in the burgeoning field of artificial intelligence.

Notable among these is Atif Malik from Bank of America, who has upgraded Cisco's rating from "neutral" to "buy" and increased the target price from $52 to $62. Malik's optimism is fueled by the potential growth AI can bring, despite it currently comprising just 2% of Cisco’s revenue. As the AI sector gains momentum, investors are expected to show increased interest in network equipment stocks, benefiting Cisco's market valuation.

Malik also revised Cisco’s earnings forecasts for fiscal years 2025 and 2026 upward by 2% and 5%, respectively. The upcoming release of Cisco’s quarterly results on November 13 is anticipated as a possible catalyst for further stock appreciation, especially after recent inclusion in Meta’s AI hardware lineup. Although there are market concerns about competition from Arista Networks, Malik suggests this partnership signifies a recognition of Cisco’s technological prowess.

Analyst projections for Cisco’s upcoming quarter stand at an earnings per share estimate of $0.87 and revenues of $13.77 billion, highlighting positive sentiment around the company’s financial health and future prospects.

Cisco, founded by Sandra Lerner and Leonard Bosack in December 1984 and headquartered in San Jose, California, continues to be a major player in the design, manufacture, and sale of networking products and services across various global regions, including the Americas, Europe, the Middle East, Africa, and the Pacific. The company's extensive product lineup underscores its leadership in an evolving market.