Cisco Trades Near 52-Week High: Is the CSCO Stock Still a Buy?

Cisco Systems CSCO shares closed at $69.52 on Wednesday, trading very close to the 52-week high of $72.55 it hit on Aug. 11. Cisco’s aggressive AI push and growing security dominance are driving prospects.  

AI Infrastructure orders from webscale customers hit $2 billion in fiscal 2025, double the management’s original expectation. However, slowing momentum in networking revenues and a challenging macroeconomic environment have been impacting share price movement. In fiscal 2025, networking revenues declined 3% from 2024’s reported figure.

Year to date (YTD), CSCO shares have appreciated 17.4%, underperforming the Zacks Computer & Technology sector, as well as close peers Broadcom AVGO and Arista Networks ANET. While the broader sector has appreciated 23%, shares of Broadcom and Arista Networks have returned 51.5% and 29.7%, respectively, over the same time frame.

CSCO Stock’s Performance

Meanwhile, Cisco shares are trading at a premium, as suggested by the Value Score of C. In terms of the forward 12-month price/sales, CSCO is trading at a premium of 4.57X, higher than the Zacks Computer Networks industry’s 4.33X.

CSCO Stock’s Valuation

However, Cisco shares are trading at a discount compared with Arista Networks and Broadcom. In terms of the forward 12-month P/S, Arista Networks and Broadcom shares are trading at 17.87X and 19.75X, respectively.

So, does an expanding clientele and strong portfolio improve CSCO’s appeal to investors? Let’s find out.

Expanding Portfolio to Boost Cisco’s Prospects

Cisco’s aggressive AI push and growing security dominance have been major growth drivers. Rapid acceleration in the capacity requirements of the network due to unprecedented levels of network traffic and an ever-evolving threat landscape bodes well for Cisco’s prospects. The AI opportunity further gets a boost from Cisco’s partnership with NVIDIA NVDA. 

Cisco’s expanded partnership with NVIDIA, under which the companies plan to offer solutions that help build AI-ready data center networks, is a game-changer. Integration of Cisco Nexus switches with NVIDIA’s Spectrum-X architecture is offering low-latency, high-speed networking for AI clusters, driving enterprise AI orders. The Cisco Secure AI factory with NVIDIA provides a trusted blueprint for building secure AI-ready data centers for enterprises, sovereign cloud providers and newly emerging Neocloud providers.

Cisco’s security business is benefiting from strong demand for both Cisco Secure Access, Hypershield and XDR. In the fourth quarter of fiscal 2025, orders grew mid-single-digit. Splunk and Cisco synergies reported 14% year-over-year growth in new logos for Splunk.  Secure Access, XDR, Hypershield and AI Defense added 750 new customers collectively in the reported quarter.

Expanding Portfolio to Aid CSCO’s Top-Line Growth

An expanding portfolio bodes well for Cisco’s growth trajectory. The company recently introduced new agentic capabilities in Cisco AI Assistant, RoomOS 26 for Cisco Devices, and purpose-built integrations across Cisco devices and the Webex Suite. These capabilities will help organizations easily manage and work seamlessly with digital agents.

Cisco announced enhancements to the Webex Customer Experience portfolio, including a new AI-powered tool for supervisors. Expected to be available in early 2026, the enhancements will unify quality management across the contact center. The company is also expanding the Webex ecosystem in India and the Kingdom of Saudi Arabia.

Last week (Oct. 8), Cisco introduced the Cisco 8223, the industry's most optimized routing system for efficiently and securely connecting data centers and powering the next generation of AI workloads. The company also announced the P200 chip, which powers 8223.

CSCO Offers Positive 2026 Guidance

For fiscal 2026, CSCO expects revenues to be $59-$60 billion compared with $56.7 billion reported in fiscal 2025. Non-GAAP earnings are expected between $4 per share and $4.06 per share compared with $3.81 per share reported in fiscal 2025.
 

Cisco Systems, Inc. Price and Consensus

Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote

The Zacks Consensus Estimate for CSCO’s fiscal 2026 revenues is pegged at $59.58 billion, indicating growth of 5.2% on a year-over-year basis. The consensus mark for CSCO’s fiscal 2026 earnings is currently pegged at $4.04 per share, unchanged over the past 30 days, indicating year-over-year growth of 6%.

Here’s Why CSCO Stock is a Buy Right Now

An expanding portfolio makes Cisco well-positioned for sustained growth in an evolving tech landscape. AI push is noteworthy, along with a growing footprint in the security space. These trends bode well for CSCO’s long-term prospects and justify a premium valuation.

CSCO currently carries a Zacks Rank #2 (Buy), suggesting that it may be wise for investors to start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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