Cisco Systems Inc (NASDAQ:CSCO, ETR:CIS) has been upgraded to ‘Buy’ from ‘Neutral’ by UBS analysts, who see the company entering a multi-year growth cycle driven by AI infrastructure demand.
They upped their price target to $88 from $74, implying 21% upside from Friday’s closing share price of about $73.
“Cisco secured more than $2 billion in AI orders in 2025, nearly all from hyperscalers with two-thirds full systems running Silicon One with the rest optics/optical,” the analysts highlighted.
“Enterprise and Sovereign demand is now ramping, with Enterprise orders approaching $1 billion, up sharply from a couple hundred million dollars in the most recent quarter positioning Cisco for sustained AI-fueled growth in 2026 and 2027.”
Cisco’s aging campus equipment also presents upgrade opportunities, UBS believes. “Cisco’s installed base includes tens of billions in aging Cat 4K/6K gear,” they wrote. “Upgrades to AI-enabled Smart Switches are expected to drive Campus growth from 5% in 2026 to roughly 7% in 2027,” they wrote.
On the security front, Cisco’s portfolio is gaining traction, with “next-gen products like Hypershield growing more than 20%, and Splunk integration gaining traction.”
UBS Evidence Lab data indicate stronger expectations for Cisco’s future sales, with 83% of respondents in the latest survey predicting sales will be “Strong” or “Very Strong,” up from 71% in the previous survey. The data suggest that Cisco is well-positioned to regain market share.
UBS also raised its 2027 earnings estimate to $4.62 per share from $4.34, and increased its target multiple to 19x from 17x. “This implies a greater than 20% discount to the S&P 500 and large-cap tech peers with weaker financial profiles,” they wrote.