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

We came across a bullish thesis on Cisco Systems, Inc. on r/Valueinvesting by MarketFlux. In this article, we will summarize the bulls’ thesis on CSCO. Cisco Systems, Inc.'s share was trading at $78.32 as of January 30th. CSCO’s trailing and forward P/E were 26.79 and 16.81 respectively according to Yahoo Finance.

Cisco Systems, Inc. designs, develops, and sells technologies that help to power, secure, and draw insights from the internet in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. CSCO shares surged roughly 7% on November 13, nearing dot-com era highs after the networking giant exceeded first-quarter expectations and raised its full-year guidance, fueled by strong demand for AI data center infrastructure.

The company reported record quarterly revenue and expects to reach its one-millionth Silicon One chip milestone in the second quarter, underscoring its leadership in networking technology. Management now projects fiscal 2026 adjusted earnings per share of $4.08 to $4.14, up from prior guidance of $4.00 to $4.06, and revenue of $60.2 billion to $61 billion, surpassing earlier estimates of $59 billion to $60 billion.

Cisco also provided second-quarter revenue guidance of $15 billion to $15.2 billion, ahead of analyst expectations of $14.72 billion. CEO Chuck Robbins highlighted that accelerating demand from hyperscale cloud providers building AI infrastructure was the primary driver of the strong performance. This momentum has sparked a wave of analyst upgrades across Wall Street, with price targets rising notably: Bank of America lifted its target to $95 from $85, Rosenblatt and Melius to $100, UBS to $90 from $88, Morgan Stanley to $82 from $77, and KeyBanc to $87 from $77.

Goldman Sachs maintained its rating, citing strong AI momentum, while William Blair reaffirmed its positive outlook. The combination of robust AI-driven growth, record revenue, and heightened investor confidence positions Cisco as a compelling investment story, reflecting both near-term earnings upside and long-term strategic relevance in the rapidly expanding AI infrastructure market.

Previously, we covered a bullish thesis on Cisco Systems, Inc. (CSCO) by Kroker Equity Research in May 2025, highlighting its transformation into a full-stack software and AI infrastructure platform, driven by recurring software revenue and the $28B Splunk acquisition. CSCO’s stock has appreciated by approximately 22.52% since coverage as the thesis played out. MarketFlux shares a similar view but emphasizes near-term growth from hyperscale AI demand and record revenue.

Cisco Systems, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held CSCO at the end of the third quarter which was 81 in the previous quarter. 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.