Morgan Stanley Sees Cisco (CSCO) Benefiting From AI Infrastructure Demand

Cisco Systems, Inc. (NASDAQ:CSCO) is included among the 13 Top Tech Stocks Paying Consistent Dividends.

On December 17, Morgan Stanley lifted its price target on Cisco Systems, Inc. (NASDAQ:CSCO) to $91 from $82 and kept an Overweight rating on the stock. The firm said the AI trade widened beyond semiconductor stocks in 2025, giving a boost to infrastructure companies. Optical networking has been a clear beneficiary. The analyst expects that trend to carry into the first half of 2026. However, looking further out, the analyst noted that investors will “need to get more selective for full year returns given multiples.”

Cisco Systems, Inc. (NASDAQ:CSCO)’s long-standing strength in networking is becoming more relevant in the age of artificial intelligence, especially as agentic AI gains traction. Products like Nexus HyperFabric bring together Cisco’s networking capabilities with Nvidia’s computing and AI software, allowing companies to build infrastructure tailored for AI workloads. Cisco is also pushing into security, describing its Hypershield platform as a fully distributed, AI-native cybersecurity solution.

Those efforts are showing up in the numbers. Cisco Systems, Inc. (NASDAQ:CSCO) posted 5% year-over-year revenue growth in fiscal 2025, with sales reaching $56.7 billion for the year ended July 26. Growth picked up in the first quarter of fiscal 2026, ending October 25, when revenue rose 8% to $14.9 billion.

Management expects that momentum to continue. For fiscal 2026, Cisco is forecasting revenue between $60.2 billion and $61 billion.

Cisco Systems, Inc. (NASDAQ:CSCO) develops and sells networking hardware, software, telecommunications equipment, and a range of technology services used by enterprises, service providers, and governments worldwide.

While we acknowledge the potential of CSCO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.