Cisco Systems, Inc. (CSCO): A Bull Case Theory

We came across a bullish thesis on Cisco Systems, Inc. on Value investing subreddit by MarketFlux. In this article, we will summarize the bulls’ thesis on CSCO. Cisco Systems, Inc.'s share was trading at $76.04 as of December 1st. CSCO’s trailing and forward P/E were 29.36 and 18.55  respectively according to Yahoo Finance.

Cisco Systems (CSCO) shares surged approximately 7% on November 13, approaching dot-com era highs, after the networking giant delivered a record first-quarter performance and raised its full-year guidance, fueled by soaring demand for AI-driven data center infrastructure. The company reported historic quarterly revenue and announced it expects to reach its one-millionth Silicon One chip milestone in fiscal second quarter, underscoring its leadership in high-performance networking solutions.

Management raised fiscal 2026 guidance, projecting adjusted EPS of $4.08 to $4.14, above the prior $4.00–$4.06 range, and revenue of $60.2 billion to $61 billion, exceeding previous expectations of $59–$60 billion. Second-quarter revenue guidance of $15 billion to $15.2 billion also topped analyst projections of $14.72 billion, highlighting sustained growth momentum. CEO Chuck Robbins attributed the outperformance to accelerating adoption of AI infrastructure by hyperscale cloud providers, signaling Cisco’s pivotal role in enabling next-generation digital transformation.

The strong results and AI tailwinds prompted broad analyst upgrades, with Bank of America raising its target to $95 from $85, Rosenblatt and Melius lifting theirs to $100, UBS increasing to $90 from $88, Morgan Stanley moving to $82 from $77, and KeyBanc raising to $87 from $77, reflecting heightened investor confidence.

Goldman Sachs maintained its rating while citing robust AI-driven demand, and William Blair reaffirmed its positive stance. With leadership in networking hardware, software, and AI-focused solutions, Cisco is well-positioned to capture continued market share gains, and the convergence of strong earnings, strategic guidance, and analyst optimism makes the stock a compelling investment opportunity, offering potential for further upside as the AI-driven infrastructure cycle accelerates.

Previously we covered a bullish thesis on Cisco Systems, Inc. (CSCO) by Kroker Equity Research in May 2025, which highlighted its transformation into a full-stack AI and cloud platform, growth in recurring software revenue, and the $28B Splunk acquisition. The stock has appreciated approximately 18.96% since our coverage. This is because the thesis largely played out. MarketFlux shares a similar perspective but emphasizes record Q1 results and AI-driven demand as key catalysts.

Cisco Systems, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 81 hedge fund portfolios held CSCO at the end of the second quarter which was 82 in the previous quarter. While we acknowledge the risk and potential of CSCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CSCO and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.