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Back in 1957, William Shockley should have owned the future.
He had co-invented the transistor, won the Nobel Prize, and had eight of the brightest young engineers in America working under him in his Mountain View, California, laboratory.
Instead, all eight engineers quit because they found Shockley impossible to work for.
With no product and no revenue, the eight quickly realized that no institution or company would support them. Back then, the suburbs and farmland south of San Francisco and north of San Jose weren’t exactly “Silicon Valley” yet. The budding tech firms in the region weren’t quite ready to invest in unproven ideas.
So they made one phone call.
A young financier named Arthur Rock listened to their story and took a risk.
Although Rock did not have the capital himself, he was willing to bet on people he deemed impressive.
He found a camera company willing to gamble $1.5 million on eight founders and an idea.
Thus, Fairchild Semiconductor was born. Fairchild eventually became one of the most influential technology companies in history, spawning Intel Corp. (INTC) and dozens of other semiconductor firms worth trillions of dollars today.
And the men Shockley lost became known affectionately as the “Traitorous Eight.” They were the accidental architects of a model Silicon Valley still runs on to this day.
Source: Intel
The Traitorous Eight: That’s Gordon Moore – of “Moore’s law” fame – on the far left.
That same instinct resurfaced in 1998 when Andy Bechtolsheim sat down with two Stanford University grad students. Right on the spot, before their company had a business model or recognizable brand, the Sun Microsystems co-founder wrote a $100,000 check to Larry Page and Sergey Brin.
Anyone who’s ever Googled… well… anything knows how that story ended. But for the record: That $100,000 check reportedly bought roughly a 1% stake in Google, a position that eventually became worth tens of billions of dollars.
More recently, in 2023 Spark Capital invested $75 million in Anthropic while it was still an obscure AI startup with little revenue. Today, millions of people are on a first-name basis with Claude, and that stake is estimated to be worth roughly $7 billion.
Across nearly 70 years, the technologies and the players keep changing. The playbook doesn’t.
Rock backed eight unknown engineers. Bechtolsheim backed two graduate students. Spark Capital backed an AI startup few people had heard of.
In each case, the biggest opportunity wasn’t buying a great business after everyone recognized it. It was recognizing exceptional founders and businesses before everyone else did.
I think that same playbook matters more today than it has in decades.
First, because AI has created an unprecedented race to develop new technologies. Second, because the companies leading that race increasingly have more money than time. And finally, because that combination is changing where some of the biggest fortunes in technology are being created.
Let me explain…
Why AI Giants Buy to Fill Critical Gaps There’s a reason this playbook has endured for nearly 70 years, and it isn’t just today’s excitement over AI.
When the prize is building the next great computing platform, speed becomes everything. If a startup has already solved a problem that would take your own engineers two years to crack, buying that company is often far cheaper than losing those two years.
That’s exactly what’s happening in today’s AI race.
Alphabet Inc. (GOOG) made that decision early, back in 2014, when it acquired the British AI startup DeepMind. Rather than spending years assembling a comparable research lab from scratch, Google bought one of the world’s best AI teams outright. More than a decade later, DeepMind sits at the heart of Google’s AI strategy.
Meta Platforms Inc. (META) reached a similar conclusion last year when it invested $14.3 billion in Scale AI. The deal wasn’t just about software. Scale AI had become one of the industry’s leading providers of the high-quality training data and infrastructure needed to build advanced AI models. Instead of trying to re-create that expertise internally, Meta bought a seat at the table.
Microsoft Corp. (MSFT) made perhaps the biggest AI boom bet of all. Its $23 billion worth of investments in OpenAI, made between 2019 and 2023, gave the company immediate access to one of the world’s leading AI developers years before it could have built a comparable capability on its own.
And this isn’t unique to AI. Cisco Systems Inc. (CSCO) spent much of the 1990s building its networking empire by buying promising startups rather than reinventing technologies itself.
Long story short, this isn’t a new playbook. It’s an old one that’s becoming even more valuable.
Every one of those deals happened because the real value had already been created inside a startup, long before Wall Street ever started paying attention.
That’s why I think one of the most important shifts in investing today is this:
The buyout, not the IPO, is increasingly becoming the finish line many early investors are aiming for.
How to Identify AI Acquisition Targets Before Wall Street Even the best startup investors get it wrong sometimes. And nobody understands that better than the funders themselves.
Bessemer Venture Partners keeps what it calls its “Anti-Portfolio” – a public list of companies it had the opportunity to back but passed on. Google is on it. So are Apple, eBay, Airbnb, FedEx, and dozens of other companies that went on to become enormous successes.
Being early is no guarantee, but it does give you the opportunity to make a decision before the rest of the market has reached the same conclusion.
That’s the common thread running through Fairchild Semiconductor, Google, Anthropic, and countless other success stories. The biggest fortunes come from someone recognizing extraordinary people and extraordinary businesses before the consensus formed.
That’s the playbook. And I believe it’s becoming more relevant again as AI reshapes the technology landscape.
The challenge, of course, is knowing what characteristics to look for when opportunities do appear.
That’s exactly what I want to show you during my free 2026 AI Megadeal Event on Thursday, July 30, at 1 p.m. Eastern.
I’ll explain why I believe AI is creating a new generation of acquisition opportunities, walk through the framework I use to identify them, and share the one company I believe best represents this shift today.
That event is free to attend, but you must reserve your seat in order to get an invitation.
If the history of Arthur Rock, Andy Bechtolsheim, and Spark Capital teaches us anything, it’s that the biggest investment opportunities often look the least obvious at the beginning.
My goal is to help you put this playbook to work before the rest of Wall Street catches on.
Jeetu Patel, Cisco president and chief product officer, talks about an upcoming AI tool named '"Antares" that will be used to hunt down software bugs and protect sensitive customer data. He also talks about the recent security breach at Hugging Face by OpenAI models and how companies can protect themselves.
Arrowstreet Capital Limited Partnership lessened its holdings in Cisco Systems, Inc. (NASDAQ:CSCO – Free Report) by 22.1% during the first quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 17,585,957 shares of the network equipment provider’s stock after selling 4,999,373 shares during the quarter. Cisco Systems accounts for 0.7% of Arrowstreet Capital Limited Partnership’s investment portfolio, making the stock its 22nd biggest position. Arrowstreet Capital Limited Partnership owned 0.45% of Cisco Systems worth $1,364,494,000 as of its most recent SEC filing.
Several other hedge funds and other institutional investors have also recently bought and sold shares of CSCO. World Investment Advisors lifted its holdings in shares of Cisco Systems by 15.4% in the fourth quarter. World Investment Advisors now owns 198,549 shares of the network equipment provider’s stock valued at $13,905,000 after buying an additional 26,455 shares during the period. WCG Wealth Advisors LLC grew its holdings in Cisco Systems by 101.8% during the fourth quarter. WCG Wealth Advisors LLC now owns 107,306 shares of the network equipment provider’s stock worth $8,266,000 after acquiring an additional 54,141 shares during the period. Vise Technologies Inc. grew its holdings in Cisco Systems by 47.1% during the fourth quarter. Vise Technologies Inc. now owns 200,341 shares of the network equipment provider’s stock worth $15,432,000 after acquiring an additional 64,144 shares during the period. Truist Financial Corp raised its position in Cisco Systems by 6.8% in the fourth quarter. Truist Financial Corp now owns 4,311,098 shares of the network equipment provider’s stock worth $332,084,000 after acquiring an additional 275,456 shares in the last quarter. Finally, Principal Financial Group Inc. raised its position in Cisco Systems by 3.2% in the fourth quarter. Principal Financial Group Inc. now owns 4,873,274 shares of the network equipment provider’s stock worth $375,388,000 after acquiring an additional 151,395 shares in the last quarter. Institutional investors own 73.33% of the company’s stock.
Analysts Set New Price Targets Several research firms have recently weighed in on CSCO. Evercore raised their price objective on shares of Cisco Systems from $110.00 to $150.00 and gave the company an “outperform” rating in a research report on Thursday, May 14th. Barclays increased their target price on shares of Cisco Systems from $76.00 to $121.00 and gave the company an “equal weight” rating in a research note on Thursday, May 14th. Wall Street Zen upgraded shares of Cisco Systems from a “hold” rating to a “buy” rating in a report on Monday. CICC Research lifted their price target on shares of Cisco Systems from $96.00 to $125.00 and gave the stock an “outperform” rating in a research report on Monday, May 18th. Finally, Wells Fargo & Company upped their price target on Cisco Systems from $95.00 to $130.00 and gave the company an “overweight” rating in a report on Thursday, May 14th. Three analysts have rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and six have given a Hold rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $123.14.
Get Our Latest Analysis on Cisco Systems
Key Stories Impacting Cisco Systems Here are the key news stories impacting Cisco Systems this week:
Positive Sentiment: Cisco shares were boosted after an analyst upgrade, suggesting Wall Street sees more upside in the stock. Cisco Systems (NASDAQ:CSCO) Shares Up 1.3% on Analyst Upgrade Positive Sentiment: Cisco is getting attention ahead of its quarterly earnings, with analysts forecasting double-digit growth in earnings per share, which could help reinforce investor confidence if results and guidance come in strong. Cisco Systems’ Quarterly Earnings Preview: What You Need to Know Positive Sentiment: SuccessKPI announced a partnership with Cisco to integrate workforce engagement and intelligence tools into Webex Contact Center, strengthening Cisco’s cloud contact-center platform and adding another AI-related growth angle. Has Cisco Systems (CSCO) Run Ahead Of Fair Value Following Its Webex Contact Center Deal? Neutral Sentiment: Cisco’s AI security research showed that multi-turn attacks can defeat leading AI models far more often than single-turn tests suggest, highlighting Cisco’s security expertise but also underscoring broader industry risks. Multi-turn attacks broke AI models 88% of the time — single-turn testing missed it, Cisco AI security lead warns at VB Transform 2026 Neutral Sentiment: Analyst commentary on Cisco and other technology companies was published, but the headline did not indicate a major new rating change for Cisco itself. Analysts Offer Insights on Technology Companies: Twilio (TWLO) and Cisco Systems (CSCO) Cisco Systems Stock Up 0.5% NASDAQ:CSCO opened at $112.76 on Friday. The business’s fifty day moving average price is $118.04 and its 200 day moving average price is $94.43. The firm has a market capitalization of $444.44 billion, a price-to-earnings ratio of 36.61, a PEG ratio of 2.86 and a beta of 1.02. The company has a current ratio of 0.92, a quick ratio of 0.81 and a debt-to-equity ratio of 0.40. Cisco Systems, Inc. has a 1-year low of $65.75 and a 1-year high of $130.37.
Cisco Systems (NASDAQ:CSCO – Get Free Report) last announced its quarterly earnings data on Wednesday, May 13th. The network equipment provider reported $1.06 EPS for the quarter, topping analysts’ consensus estimates of $1.03 by $0.03. The firm had revenue of $15.84 billion during the quarter, compared to analyst estimates of $15.56 billion. Cisco Systems had a return on equity of 28.44% and a net margin of 20.14%.The business’s quarterly revenue was up 12.0% compared to the same quarter last year. During the same period last year, the company posted $0.96 EPS. Cisco Systems has set its Q4 2026 guidance at 1.160-1.180 EPS and its FY 2026 guidance at 4.270-4.290 EPS. On average, sell-side analysts forecast that Cisco Systems, Inc. will post 3.54 earnings per share for the current fiscal year.
Cisco Systems Announces Dividend The business also recently declared a quarterly dividend, which was paid on Wednesday, July 22nd. Stockholders of record on Monday, July 6th were issued a dividend of $0.42 per share. This represents a $1.68 annualized dividend and a dividend yield of 1.5%. The ex-dividend date was Monday, July 6th. Cisco Systems’s payout ratio is currently 54.55%.
Insiders Place Their Bets In related news, EVP Oliver Tuszik sold 2,761 shares of the stock in a transaction on Friday, May 15th. The stock was sold at an average price of $114.61, for a total transaction of $316,438.21. Following the completion of the sale, the executive vice president directly owned 180,877 shares in the company, valued at approximately $20,730,312.97. This trade represents a 1.50% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Charles Robbins sold 21,400 shares of Cisco Systems stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $120.03, for a total value of $2,568,642.00. Following the sale, the chief executive officer directly owned 637,085 shares of the company’s stock, valued at approximately $76,469,312.55. The trade was a 3.25% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 47,650 shares of company stock valued at $5,668,823 in the last three months. Company insiders own 0.01% of the company’s stock.
Cisco Systems Company Profile (Free Report)
Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.
In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.
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When Cisco ran 6,986 multi-turn attacks against 15 flagship models, attackers who adapted across the conversation broke through as often as 88.3% of the time. Amy Chang, Cisco's head of AI threat intelligence and security research, brought that finding to the agentic security panel at VB Transform 2026; the number should worry anyone still running single-turn red-teaming programs.
ST. LOUIS--(BUSINESS WIRE)--World Wide Technology (WWT), a global technology solutions provider, today announced it has earned two significant recognitions from Cisco, including being named a Cisco Global Partner and unlocking the Cisco Secure Networking Specialization in the United States. WWT is one of only six partners worldwide to become a Cisco Global Partner and is among the first in the US to achieve the Secure Networking Specialization, underscoring the company's continued investment in.
Assetmark Inc. decreased its position in shares of Cisco Systems, Inc. (NASDAQ:CSCO – Free Report) by 7.4% during the first quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor owned 137,869 shares of the network equipment provider’s stock after selling 11,032 shares during the quarter. Assetmark Inc.’s holdings in Cisco Systems were worth $10,697,000 at the end of the most recent quarter.
Several other institutional investors have also recently made changes to their positions in the company. MidAtlantic Capital Management Inc. purchased a new stake in Cisco Systems in the fourth quarter worth about $25,000. Intesa Sanpaolo Wealth Management purchased a new stake in shares of Cisco Systems in the 4th quarter worth approximately $25,000. Networth Advisors LLC boosted its stake in shares of Cisco Systems by 276.4% during the first quarter. Networth Advisors LLC now owns 335 shares of the network equipment provider’s stock valued at $26,000 after purchasing an additional 246 shares in the last quarter. Financial Life Planners purchased a new position in Cisco Systems during the first quarter valued at approximately $27,000. Finally, Manning & Napier Advisors LLC increased its holdings in Cisco Systems by 137.0% during the first quarter. Manning & Napier Advisors LLC now owns 346 shares of the network equipment provider’s stock valued at $27,000 after buying an additional 200 shares during the period. Hedge funds and other institutional investors own 73.33% of the company’s stock.
Insiders Place Their Bets In related news, EVP Oliver Tuszik sold 2,761 shares of the stock in a transaction that occurred on Friday, May 15th. The shares were sold at an average price of $114.61, for a total value of $316,438.21. Following the transaction, the executive vice president owned 180,877 shares in the company, valued at approximately $20,730,312.97. This represents a 1.50% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Deborah L. Stahlkopf sold 6,586 shares of the firm’s stock in a transaction that occurred on Friday, May 15th. The stock was sold at an average price of $117.31, for a total transaction of $772,603.66. Following the transaction, the executive vice president directly owned 177,223 shares of the company’s stock, valued at $20,790,030.13. This represents a 3.58% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 47,650 shares of company stock valued at $5,668,823. Insiders own 0.01% of the company’s stock.
Cisco Systems Trading Down 1.1% NASDAQ CSCO opened at $110.70 on Tuesday. Cisco Systems, Inc. has a 12-month low of $65.75 and a 12-month high of $130.37. The company has a fifty day simple moving average of $117.63 and a two-hundred day simple moving average of $93.67. The company has a current ratio of 0.92, a quick ratio of 0.81 and a debt-to-equity ratio of 0.40. The stock has a market cap of $436.32 billion, a P/E ratio of 35.94, a P/E/G ratio of 2.85 and a beta of 1.02.
Cisco Systems (NASDAQ:CSCO – Get Free Report) last announced its quarterly earnings data on Wednesday, May 13th. The network equipment provider reported $1.06 earnings per share for the quarter, beating analysts’ consensus estimates of $1.03 by $0.03. Cisco Systems had a net margin of 20.14% and a return on equity of 28.44%. The firm had revenue of $15.84 billion for the quarter, compared to analyst estimates of $15.56 billion. During the same period in the previous year, the company earned $0.96 earnings per share. The business’s quarterly revenue was up 12.0% compared to the same quarter last year. Cisco Systems has set its Q4 2026 guidance at 1.160-1.180 EPS and its FY 2026 guidance at 4.270-4.290 EPS. On average, analysts forecast that Cisco Systems, Inc. will post 3.54 earnings per share for the current year.
Cisco Systems Announces Dividend The company also recently declared a quarterly dividend, which will be paid on Wednesday, July 22nd. Shareholders of record on Monday, July 6th will be paid a dividend of $0.42 per share. This represents a $1.68 annualized dividend and a yield of 1.5%. The ex-dividend date is Monday, July 6th. Cisco Systems’s payout ratio is presently 54.55%.
Analyst Ratings Changes A number of equities research analysts recently weighed in on CSCO shares. New Street Research upped their price objective on Cisco Systems from $82.00 to $122.00 and gave the stock a “neutral” rating in a research note on Thursday, May 14th. The Goldman Sachs Group increased their price target on shares of Cisco Systems from $116.00 to $125.00 and gave the company a “neutral” rating in a research report on Wednesday, June 3rd. KeyCorp raised their price target on shares of Cisco Systems from $125.00 to $130.00 and gave the company an “overweight” rating in a report on Thursday, June 25th. Piper Sandler boosted their price objective on shares of Cisco Systems from $86.00 to $132.00 and gave the stock a “neutral” rating in a research note on Thursday, May 14th. Finally, Weiss Ratings raised shares of Cisco Systems from a “buy (b-)” rating to a “buy (b)” rating in a research report on Friday, May 29th. Three investment analysts have rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and six have issued a Hold rating to the company’s stock. According to MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $123.14.
Get Our Latest Research Report on CSCO
Cisco Systems News Roundup Here are the key news stories impacting Cisco Systems this week:
Positive Sentiment: Wall Street Zen upgraded Cisco Systems to “Buy,” adding to a generally favorable analyst backdrop for the stock. Wall Street Zen Upgrades Cisco Systems (NASDAQ:CSCO) to “Buy” Positive Sentiment: Cisco continues to be viewed as an AI infrastructure play, with reports noting that the company has raised its AI order target and is working on quantum networking and AI-powered Webex Contact Center tools, which could support longer-term growth. Cisco (CSCO) Tests Quantum Networking While Webex Adds AI Contact Center Partner Positive Sentiment: Commentary around Cisco’s stock remaining below its 52-week high despite strong year-to-date gains has fueled additional bullish price-prediction headlines, reinforcing optimism about the company’s AI-related upside. Price Prediction: Cisco Stock Will Double on This Date Neutral Sentiment: Cisco has been labeled a “trending stock” in recent Zacks coverage, reflecting heightened investor attention rather than a clear new catalyst. Here is What to Know Beyond Why Cisco Systems, Inc. (CSCO) is a Trending Stock Neutral Sentiment: Analyst-focused articles reiterate that consensus brokerage ratings remain constructive, but they do not point to a major new business catalyst. Wall Street Analysts Think Cisco (CSCO) Is a Good Investment: Is It? Negative Sentiment: Cisco fell alongside a broader market dip, and one article specifically highlighted that CSCO’s decline was slightly worse than the market’s move, contributing to near-term weakness. Cisco Systems (CSCO) Sees a More Significant Dip Than Broader Market: Some Facts to Know Negative Sentiment: Reports that Cisco may be considering a $150 million to $200 million acquisition of Zafran Security created some uncertainty, especially after the startup denied active sale talks, which may have weighed on sentiment. Cisco Systems (CSCO) Stock Dips Amid Zafran Security Acquisition Reports Cisco Systems Profile (Free Report)
Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.
In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.
Featured Stories Five stocks we like better than Cisco Systems The Ugliest Stocks in the Market Just Got a Very Expensive Vote of Confidence Is Domino’s Stock Serving Up a Buying Opportunity? A $1T Black Hole: SpaceX Eyes Pentagon AI to Break Free Why Gold Miners Could Be the Market’s Biggest Comeback Story Want to see what other hedge funds are holding CSCO? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cisco Systems, Inc. (NASDAQ:CSCO – Free Report).
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Andra AP fonden boosted its position in Cisco Systems, Inc. (NASDAQ:CSCO – Free Report) by 23.1% during the 1st quarter, according to its most recent Form 13F filing with the SEC. The fund owned 574,167 shares of the network equipment provider’s stock after purchasing an additional 107,689 shares during the period. Cisco Systems comprises 0.6% of Andra AP fonden’s portfolio, making the stock its 25th biggest holding. Andra AP fonden’s holdings in Cisco Systems were worth $44,550,000 at the end of the most recent quarter.
A number of other large investors have also made changes to their positions in CSCO. Norges Bank bought a new stake in shares of Cisco Systems during the 4th quarter valued at $4,473,272,000. Auto Owners Insurance Co raised its holdings in Cisco Systems by 8,718.3% in the 4th quarter. Auto Owners Insurance Co now owns 51,952,421 shares of the network equipment provider’s stock worth $400,190,000 after purchasing an additional 51,363,281 shares during the period. Price T Rowe Associates Inc. MD raised its holdings in Cisco Systems by 103.2% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 29,289,151 shares of the network equipment provider’s stock worth $2,256,144,000 after purchasing an additional 14,874,407 shares during the period. Franklin Resources Inc. lifted its position in Cisco Systems by 18.0% during the fourth quarter. Franklin Resources Inc. now owns 50,320,905 shares of the network equipment provider’s stock valued at $3,876,219,000 after purchasing an additional 7,679,422 shares in the last quarter. Finally, Invesco Ltd. lifted its position in Cisco Systems by 11.6% during the fourth quarter. Invesco Ltd. now owns 59,836,782 shares of the network equipment provider’s stock valued at $4,609,227,000 after purchasing an additional 6,224,062 shares in the last quarter. 73.33% of the stock is currently owned by institutional investors.
Wall Street Analysts Forecast Growth CSCO has been the subject of a number of analyst reports. The Goldman Sachs Group upped their price target on Cisco Systems from $116.00 to $125.00 and gave the stock a “neutral” rating in a research report on Wednesday, June 3rd. Piper Sandler lifted their price objective on Cisco Systems from $86.00 to $132.00 and gave the company a “neutral” rating in a research report on Thursday, May 14th. New Street Research boosted their price objective on Cisco Systems from $82.00 to $122.00 and gave the company a “neutral” rating in a research note on Thursday, May 14th. Zacks Research raised shares of Cisco Systems from a “hold” rating to a “strong-buy” rating in a report on Tuesday, June 30th. Finally, BNP Paribas Exane raised their target price on shares of Cisco Systems from $87.00 to $132.00 and gave the stock an “outperform” rating in a research note on Thursday, May 14th. Three research analysts have rated the stock with a Strong Buy rating, fifteen have given a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $123.14.
Read Our Latest Report on Cisco Systems
Trending Headlines about Cisco Systems Here are the key news stories impacting Cisco Systems this week:
Positive Sentiment: Wall Street Zen upgraded Cisco Systems to “Buy,” adding to a generally favorable analyst backdrop for the stock. Wall Street Zen Upgrades Cisco Systems (NASDAQ:CSCO) to “Buy” Positive Sentiment: Cisco continues to be viewed as an AI infrastructure play, with reports noting that the company has raised its AI order target and is working on quantum networking and AI-powered Webex Contact Center tools, which could support longer-term growth. Cisco (CSCO) Tests Quantum Networking While Webex Adds AI Contact Center Partner Positive Sentiment: Commentary around Cisco’s stock remaining below its 52-week high despite strong year-to-date gains has fueled additional bullish price-prediction headlines, reinforcing optimism about the company’s AI-related upside. Price Prediction: Cisco Stock Will Double on This Date Neutral Sentiment: Cisco has been labeled a “trending stock” in recent Zacks coverage, reflecting heightened investor attention rather than a clear new catalyst. Here is What to Know Beyond Why Cisco Systems, Inc. (CSCO) is a Trending Stock Neutral Sentiment: Analyst-focused articles reiterate that consensus brokerage ratings remain constructive, but they do not point to a major new business catalyst. Wall Street Analysts Think Cisco (CSCO) Is a Good Investment: Is It? Negative Sentiment: Cisco fell alongside a broader market dip, and one article specifically highlighted that CSCO’s decline was slightly worse than the market’s move, contributing to near-term weakness. Cisco Systems (CSCO) Sees a More Significant Dip Than Broader Market: Some Facts to Know Negative Sentiment: Reports that Cisco may be considering a $150 million to $200 million acquisition of Zafran Security created some uncertainty, especially after the startup denied active sale talks, which may have weighed on sentiment. Cisco Systems (CSCO) Stock Dips Amid Zafran Security Acquisition Reports Cisco Systems Stock Down 1.1% Shares of CSCO opened at $110.70 on Tuesday. The business’s 50 day moving average is $117.63 and its 200 day moving average is $93.67. The company has a current ratio of 0.92, a quick ratio of 0.81 and a debt-to-equity ratio of 0.40. Cisco Systems, Inc. has a 12-month low of $65.75 and a 12-month high of $130.37. The company has a market capitalization of $436.32 billion, a PE ratio of 35.94, a price-to-earnings-growth ratio of 2.85 and a beta of 1.02.
Cisco Systems (NASDAQ:CSCO – Get Free Report) last posted its quarterly earnings results on Wednesday, May 13th. The network equipment provider reported $1.06 earnings per share for the quarter, topping the consensus estimate of $1.03 by $0.03. The business had revenue of $15.84 billion during the quarter, compared to the consensus estimate of $15.56 billion. Cisco Systems had a return on equity of 28.44% and a net margin of 20.14%.The firm’s revenue for the quarter was up 12.0% compared to the same quarter last year. During the same period in the prior year, the company posted $0.96 EPS. Cisco Systems has set its Q4 2026 guidance at 1.160-1.180 EPS and its FY 2026 guidance at 4.270-4.290 EPS. Research analysts expect that Cisco Systems, Inc. will post 3.54 earnings per share for the current fiscal year.
Cisco Systems Dividend Announcement The business also recently declared a quarterly dividend, which will be paid on Wednesday, July 22nd. Shareholders of record on Monday, July 6th will be paid a $0.42 dividend. The ex-dividend date is Monday, July 6th. This represents a $1.68 annualized dividend and a yield of 1.5%. Cisco Systems’s payout ratio is presently 54.55%.
Insider Buying and Selling at Cisco Systems In other news, EVP Oliver Tuszik sold 2,761 shares of the firm’s stock in a transaction dated Friday, May 15th. The stock was sold at an average price of $114.61, for a total transaction of $316,438.21. Following the completion of the transaction, the executive vice president owned 180,877 shares in the company, valued at $20,730,312.97. This trade represents a 1.50% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thimaya K. Subaiya sold 7,127 shares of the firm’s stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $119.91, for a total value of $854,598.57. Following the transaction, the executive vice president owned 140,857 shares of the company’s stock, valued at $16,890,162.87. This represents a 4.82% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 47,650 shares of company stock worth $5,668,823. Insiders own 0.01% of the company’s stock.
About Cisco Systems (Free Report)
Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.
In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.
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In the latest close session, Cisco Systems (CSCO - Free Report) was down 1.11% at $110.70. The stock's performance was behind the S&P 500's daily loss of 0.19%. At the same time, the Dow lost 0.59%, and the tech-heavy Nasdaq lost 0.05%.
Shares of the seller of routers, switches, software and services witnessed a loss of 6.36% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 4.32%, and the S&P 500's gain of 0.55%.
Investors will be eagerly watching for the performance of Cisco Systems in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.17, signifying a 18.18% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $16.85 billion, indicating a 14.86% increase compared to the same quarter of the previous year.
CSCO's full-year Zacks Consensus Estimates are calling for earnings of $4.28 per share and revenue of $62.95 billion. These results would represent year-over-year changes of +12.34% and +11.11%, respectively.
Any recent changes to analyst estimates for Cisco Systems should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.04% upward. Right now, Cisco Systems possesses a Zacks Rank of #2 (Buy).
Looking at valuation, Cisco Systems is presently trading at a Forward P/E ratio of 26.14. This represents a premium compared to its industry average Forward P/E of 19.52.
We can also see that CSCO currently has a PEG ratio of 2.36. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Networking industry had an average PEG ratio of 1.75 as trading concluded yesterday.
The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 199, putting it in the bottom 20% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Cisco Systems (CSCO - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this seller of routers, switches, software and services have returned -6.4%, compared to the Zacks S&P 500 composite's +0.6% change. During this period, the Zacks Computer - Networking industry, which Cisco falls in, has lost 4.6%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Cisco is expected to post earnings of $1.17 per share, indicating a change of +18.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $4.28 points to a change of +12.3% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $4.78 indicates a change of +11.7% from what Cisco is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Cisco is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Cisco, the consensus sales estimate for the current quarter of $16.85 billion indicates a year-over-year change of +14.9%. For the current and next fiscal years, $62.95 billion and $67.75 billion estimates indicate +11.1% and +7.6% changes, respectively.
Last Reported Results and Surprise HistoryCisco reported revenues of $15.84 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $1.06 for the same period compares with $0.96 a year ago.
Compared to the Zacks Consensus Estimate of $15.58 billion, the reported revenues represent a surprise of +1.71%. The EPS surprise was +1.92%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Cisco is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Cisco. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) has quietly become one of the most interesting AI infrastructure trades in the market. Shares are up 47.42% year to date, and CEO Chuck Robbins raised the AI order target for fiscal 2026 to $9 billion from $5 billion. The stock sits at $111.94. Can this networking giant double to $225 by 2031? Let’s run the numbers.
Why Cisco Shares Are Stuck Below $120 Right Now Recent price action has been weak. Cisco is down 7.72% over the last week and 4.24% over the past month after brushing the 52-week high near $129.88. The pullback reflects real concerns. Coverage on July 15 flagged “slowing demand for traditional networking equipment” and a bearish note tied to execution risk on the $9B AI order target, which requires a significant ramp-up in the fourth quarter.
Gross margins contracted modestly on the AI hardware mix shift. With a beta of 1.007, CSCO tracks the broader market, so any tech sentiment wobble hits shares directly. This name is pricing in a lot of good news already.
Wall Street Sees 16% Upside. Our Model Says More. Consensus is constructive but not screaming. The analyst target is $130.23, backed by 4 Strong Buy, 13 Buy, 8 Hold, 0 Sell, and 1 Strong Sell ratings, with 65% bullish sentiment.
Our model puts the 12-month base case at $133.49 for a 19.25% upside, with a bull scenario of $139.62 and confidence rated at 90%. JPMorgan moved to a $145 target from $120. The sell side is underweighting the AI order acceleration. When quarterly earnings compound 35.4% year over year, a static $130 target looks stale.
The Path to $225 Per Share by 2031 Reaching $225 from $111.94 requires a gain of 101%. That is a full double. With forward EPS of $4.71, a price of $225 implies a forward P/E of 48x. Our base case already implies 27x, meaning the bold target requires roughly 20x of additional multiple expansion, or heavy EPS compounding to compress that multiple back down.
The forward P/E compression story is where this gets interesting. If EPS grows in line with the current 37.1% YoY earnings acceleration, the multiple at $225 shrinks fast. The 247Factor already sits at 1.141, powered by a 1.15 sector momentum multiplier and strong analyst consensus.
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Catalysts include the Rockwell partnership on Full-Stack Software-Defined Manufacturing, data center switching orders up more than 40% year-over-year, and Robbins stating “Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI.”
Primary risk: hyperscaler AI capex could normalize before Cisco laps tough comps.
Where Cisco Trades Today vs Its Earnings Power At $111.94 against forward EPS of $4.71, CSCO trades at roughly 24x forward earnings. That is a premium to Cisco’s historical range but reasonable given the AI mix. Shares sit near the top of the 52-week range of $64.42 to $129.88. Over the last decade, Cisco stock returned 403.39%, so long-term compounding here has clear precedent.
$225 Is a Stretch, But Here’s Why It’s Possible To hit $225 by 2031, Cisco needs a 101% gain. Realistic? A stretch, but achievable.
Three things need to go right: AI order growth must keep beating raised guidance, the networking supercycle must extend into a multi-year campus refresh, and margins must hold as the mix shifts. A collapse in hyperscaler capex derails it. We’ve outlined the blueprint for how Cisco Systems could reach $225 in 2031.
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When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cisco Systems (CSCO - Free Report) .
Cisco currently has an average brokerage recommendation (ABR) of 1.79, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 26 brokerage firms. An ABR of 1.79 approximates between Strong Buy and Buy.
Of the 26 recommendations that derive the current ABR, 15 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 57.7% and 3.9% of all recommendations.
Brokerage Recommendation Trends for CSCO
Check price target & stock forecast for Cisco here>>>
While the ABR calls for buying Cisco, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CSCO Worth Investing In?In terms of earnings estimate revisions for Cisco, the Zacks Consensus Estimate for the current year has increased 0% over the past month to $4.28.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Cisco. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Cisco may serve as a useful guide for investors.
Dimensional Fund Advisors LP decreased its position in Cisco Systems, Inc. (NASDAQ:CSCO – Free Report) by 1.6% in the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 27,615,249 shares of the network equipment provider’s stock after selling 440,799 shares during the period. Cisco Systems makes up about 0.4% of Dimensional Fund Advisors LP’s portfolio, making the stock its 18th biggest holding. Dimensional Fund Advisors LP owned about 0.70% of Cisco Systems worth $2,142,681,000 at the end of the most recent reporting period.
Other institutional investors and hedge funds also recently added to or reduced their stakes in the company. Intesa Sanpaolo Wealth Management acquired a new position in shares of Cisco Systems in the fourth quarter valued at about $25,000. MidAtlantic Capital Management Inc. acquired a new stake in shares of Cisco Systems during the fourth quarter worth about $25,000. Networth Advisors LLC lifted its holdings in shares of Cisco Systems by 276.4% during the first quarter. Networth Advisors LLC now owns 335 shares of the network equipment provider’s stock worth $26,000 after purchasing an additional 246 shares during the period. Manning & Napier Advisors LLC boosted its position in Cisco Systems by 137.0% in the first quarter. Manning & Napier Advisors LLC now owns 346 shares of the network equipment provider’s stock valued at $27,000 after buying an additional 200 shares during the last quarter. Finally, Financial Life Planners acquired a new position in Cisco Systems in the 1st quarter worth approximately $27,000. Institutional investors and hedge funds own 73.33% of the company’s stock.
Analyst Ratings Changes A number of equities analysts have issued reports on the stock. Piper Sandler raised their price target on shares of Cisco Systems from $86.00 to $132.00 and gave the stock a “neutral” rating in a research report on Thursday, May 14th. HSBC raised shares of Cisco Systems from a “hold” rating to a “buy” rating and upped their price objective for the company from $77.00 to $137.00 in a report on Friday, May 15th. Argus raised their target price on shares of Cisco Systems from $100.00 to $150.00 and gave the stock a “buy” rating in a report on Tuesday, May 19th. Wells Fargo & Company boosted their target price on shares of Cisco Systems from $95.00 to $130.00 and gave the company an “overweight” rating in a research report on Thursday, May 14th. Finally, BNP Paribas Exane upped their price target on shares of Cisco Systems from $87.00 to $132.00 and gave the company an “outperform” rating in a report on Thursday, May 14th. Three research analysts have rated the stock with a Strong Buy rating, fifteen have given a Buy rating and six have issued a Hold rating to the company. According to data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average price target of $123.14.
Get Our Latest Stock Report on Cisco Systems
Key Cisco Systems News Here are the key news stories impacting Cisco Systems this week:
Positive Sentiment: Cisco is being highlighted as a key AI infrastructure play, with commentary arguing the company could benefit from rising demand for networking gear tied to AI buildouts. Price Prediction: Cisco Will Hit $170 on This Date Positive Sentiment: Investor sentiment is also supported by a favorable long-term track record under CEO Chuck Robbins, with a recent article pointing to strong returns since he took over in 2015. A $10,000 Investment in Cisco When Chuck Robbins Became CEO Is Worth This Much Today Neutral Sentiment: One analysis says Cisco stock looks fairly valued around current levels, suggesting upside may depend on future execution rather than an obvious valuation discount. Cisco (CSCO) Stock Looks About Right As Security Deal Talk Grows Neutral Sentiment: Cisco was also mentioned in a dividend-focused roundup of legacy tech names, reinforcing its appeal as a cash-generating, shareholder-friendly stock. 4 Tech Stocks Throwing Off Dividends Negative Sentiment: Technical traders are watching a weakening chart, with Cisco reportedly below its 50-day moving average and near key support, which could cap gains if buyers fail to step in. Cisco Systems (CSCO) Price Forecast: Correction Deepens as Key Support Nears Cisco Systems Price Performance Shares of CSCO stock opened at $111.94 on Monday. Cisco Systems, Inc. has a twelve month low of $65.75 and a twelve month high of $130.37. The stock has a market cap of $441.20 billion, a P/E ratio of 36.34, a P/E/G ratio of 2.85 and a beta of 1.02. The stock has a 50 day moving average of $117.40 and a 200 day moving average of $93.44. The company has a current ratio of 0.92, a quick ratio of 0.81 and a debt-to-equity ratio of 0.40.
Cisco Systems (NASDAQ:CSCO – Get Free Report) last released its quarterly earnings data on Wednesday, May 13th. The network equipment provider reported $1.06 EPS for the quarter, topping the consensus estimate of $1.03 by $0.03. The business had revenue of $15.84 billion for the quarter, compared to analyst estimates of $15.56 billion. Cisco Systems had a return on equity of 28.44% and a net margin of 20.14%.The business’s quarterly revenue was up 12.0% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.96 EPS. Cisco Systems has set its Q4 2026 guidance at 1.160-1.180 EPS and its FY 2026 guidance at 4.270-4.290 EPS. As a group, sell-side analysts expect that Cisco Systems, Inc. will post 3.54 EPS for the current year.
Cisco Systems Dividend Announcement The company also recently declared a quarterly dividend, which will be paid on Wednesday, July 22nd. Investors of record on Monday, July 6th will be issued a dividend of $0.42 per share. The ex-dividend date of this dividend is Monday, July 6th. This represents a $1.68 dividend on an annualized basis and a yield of 1.5%. Cisco Systems’s dividend payout ratio is 54.55%.
Insider Activity at Cisco Systems In other Cisco Systems news, EVP Deborah L. Stahlkopf sold 6,586 shares of Cisco Systems stock in a transaction on Friday, May 15th. The shares were sold at an average price of $117.31, for a total value of $772,603.66. Following the completion of the transaction, the executive vice president owned 177,223 shares of the company’s stock, valued at approximately $20,790,030.13. The trade was a 3.58% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Oliver Tuszik sold 2,607 shares of the company’s stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $121.12, for a total transaction of $315,759.84. Following the completion of the transaction, the executive vice president owned 172,727 shares of the company’s stock, valued at approximately $20,920,694.24. This trade represents a 1.49% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 47,650 shares of company stock valued at $5,668,823 in the last quarter. 0.01% of the stock is currently owned by insiders.
Cisco Systems Profile (Free Report)
Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.
In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.
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Cisco Systems (NASDAQ: CSCO) is set to pay its next quarterly dividend on July 22, 2026, providing shareholders with another cash distribution as the networking giant continues to benefit from strong AI-driven demand and enterprise infrastructure spending.
According to the dividend data, Cisco’s upcoming dividend payment is $0.42 per share, unchanged from the previous quarter.
Cisco dividend payment date. Source: Dividend.com The company currently offers a forward annual dividend of $1.68 per share and a dividend yield of approximately 1.53%.
Cisco dividend details. Source: Dividend.com For investors holding 100 shares of CSCO stock, the upcoming dividend payment will amount to $42 before applicable taxes.
On an annualized basis, an investor holding 100 Cisco shares would generate about $168 in dividend income, assuming the company maintains its current payout rate of $1.68 per share annually.
Notably, Cisco has increased its dividend for 14 consecutive years, highlighting its commitment to returning capital to shareholders.
The company pays dividends every quarter and currently maintains a forward payout ratio of 35.11%, leaving room for continued shareholder distributions while funding growth initiatives.
Cisco stock fundamentals The latest CSCO dividend payout comes as Cisco continues to post strong operational performance in 2026.
The company reported fiscal third-quarter revenue of $15.84 billion, up 12% year-over-year, while non-GAAP earnings per share reached $1.06.
AI infrastructure has emerged as a major growth driver for Cisco, with the company reporting $5.3 billion in AI-related orders year-to-date and raising its fiscal 2026 AI order target to $9 billion.
Despite concerns about valuation following a strong rally earlier in the year, analysts continue to view Cisco as a key beneficiary of ongoing investments in AI networking, data center infrastructure, and enterprise technology upgrades.
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The Operator Era at Cisco When Chuck Robbins took the CEO seat at Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) on July 26, 2015, the company was a slow-growth hardware vendor sliding into the shadow of cloud upstarts. Robbins spent the next decade reworking Cisco around software, security, and recurring revenue, capped by the roughly $28 billion Splunk acquisition that closed in 2024, the largest deal in company history.
The pivot to AI-era networking now dominates the company’s narrative. Robbins told investors, “Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI.” Management raised the FY26 AI infrastructure order target to $9 billion from $5 billion, with AI orders hitting $5.3 billion year to date. Q3 FY26 delivered $1.06 in non-GAAP EPS on $15.84 billion in revenue, up 12% year over year.
$10,000 Grew Into $54,132 A $10,000 stake made on Robbins’s first day and held through July 16, 2026, returned 441.32% on price alone, excluding dividends, which grew from $0.21 to $0.42 per quarter. The same money in the SPDR S&P 500 ETF Trust (NYSEARCA: SPY) returned 263.12%.
Cisco S&P 500 1-Year Return $16,612 (66.12%) $12,027 (20.27%) 5-Year Return $23,494 (134.94%) $17,404 (74.04%) 10-Year Return $49,330 (393.3%) $34,690 (246.9%) Robbins Era $54,132 (441.32%) $36,312 (263.12%) Most of the outperformance materialized late in the period. Cisco was mocked as dead money for years before AI networking demand pulled shares from a $65.75 52-week low to a $130.37 high. The stock is up 42.4% year to date. Anyone who held through the flat 2022–2023 stretch was rewarded; anyone who chased the recent peak is already down 8.3% in a month.
Grading Robbins: A-Minus Robbins inherited a lumbering hardware vendor and delivered a top-quartile decade against the benchmark while doubling the dividend. However, the Splunk integration and AI order ramp remain unproven, which costs him half a letter grade.
The Bull and Bear Case From Here The bull case rests on hyperscaler AI networking spend continuing to expand and the $9 billion FY26 order target landing. Wall Street’s $129.09 consensus price target implies 17.7% further upside. The bear case is that whitebox switches, Arista, and Nvidia’s networking stack eat share while gross margins compress from the AI hardware mix. At a 25x forward P/E with a 1.5% yield, the setup skews cautiously bullish, though a pullback closer to the $86.84 200-day moving average would offer a wider margin of safety.
Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction | CSCO Price Prediction) has quietly become one of the most important AI infrastructure names on the market. Shares are up 57.05% year to date and CEO Chuck Robbins just told the market that “Cisco is well-positioned as the critical infrastructure for the AI era.”
The stock closed Monday at $119.25 and now trades near $117.46. So can this network giant push to $170 by 2027? Let’s run the numbers.
What’s Holding Cisco Back Right Now Cisco is digesting a monster run. Shares are down 1.16% over the past month after ripping 4.62% in the past week, and the stock now sits about 2% below its 52-week high of $129.88. The pause makes sense.
Gross margins compressed year over year as product mix shifted toward higher-volume AI hardware, services revenue declined 1%, and management flagged restructuring charges of up to $1 billion spanning FY26 and FY27. With a beta of 1.01, Cisco moves with the market, and after a 57% rally, some cooling was inevitable.
Wall Street Sees 8% Upside. Our Model Sees More The Street’s consensus target sits at $127.18, built on 4 Strong Buy, 13 Buy, 8 Hold, and 1 Strong Sell ratings. That is a modest single-digit implied return. Our internal model is more constructive, pointing to a base case of $138.88, or 18.24% upside, with a bull case of $144.75 and a confidence rating of 90%.
My view: the Street is anchored on the old Cisco. Earnings growth just accelerated to 37.1% YoY and 65% of analysts are bullish. Those numbers do not describe a $127 stock.
The Path to $170 Per Share Reaching $170 from today’s price of $117.46 would require a gain of 44.7%. With forward EPS of $4.71, a price of $170 implies a forward P/E of 36x. Our base case of $138.88 already implies 29x, meaning the bold target requires 7x of additional multiple expansion.
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That is achievable if the AI story keeps compounding. Cisco raised its FY26 AI infrastructure order forecast to $9 billion from $5 billion, with $5.3 billion already booked YTD. Networking product orders grew more than 50% YoY and data center switching jumped more than 40%.
A recent piece framed the setup as “Cisco Stock Is Rising Again. The $9 Billion AI Bet Could Be Behind It.” Robbins reinforced the case, saying “we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI.” The primary risk is hyperscaler concentration if cloud capex slows.
Where Cisco Trades Today vs Its Earnings Power At today’s price, Cisco trades at roughly 25x forward earnings on $4.71 in forward EPS. That is a premium to its historical range but reasonable given 37.1% earnings growth and an operating margin of 25%.
Shares sit between a 52-week low of $64.42 and high of $129.88, and the 10-year total return of 438.06% shows this is more than a legacy hardware name. If AI orders keep compounding, the multiple has room.
Is $170 Realistic? Here’s My Take Getting Cisco to $170 requires the 44.7% gain outlined above and continued execution on the AI infrastructure ramp. It is a stretch, but not a fantasy.
Three things need to go right: the $9 billion AI order target converts to revenue faster than expected, the campus networking refresh cycle keeps orders growing above 25%, and gross margins stabilize as the product mix normalizes. A hyperscaler capex reset would derail it. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Cisco Systems could reach $170 in 2027.
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CSCO weekly chart shows potential bull flag and retracement towards top boundary of rising chanel. Source: TradingView Key Downside Levels to Watch The continuation of the bearish correction suggests that lower support levels may be tested before the correction is complete. If support fails to hold near the 38.2% Fibonacci level, the 50% retracement at $103.34 becomes the next downside target. That area may soon be joined by the rising 20-week moving average, adding to its potential significance. In addition, the upper boundary line of the original rising trend channel is near the 50% retracement zone. Since it has not yet been tested as support following the May channel breakout, there is a good chance that it will be tested before demand begins to recover.
Bullish Flag Holds the Key During the pullback, CSCO has formed a potential bullish flag pattern bounded by two parallel declining trendlines. The lower boundary line defines dynamic support, and given the structure of the formation, the 50% retracement level may be reached while maintaining the integrity of the potential bullish flag pattern. However, if support fails at the lower flag boundary, it would signal more significant selling pressure and further deterioration of the potentially bullish pattern.
Whether buyers can successfully defend support near the current Fibonacci retracement or the deeper 50% retracement zone will likely determine if this pullback ultimately proves to be a healthy correction within a longer-term uptrend or the start of a more significant corrective phase.
Key Takeaways Cisco raised its fiscal 2026 AI infrastructure order target to about $9 billion on hyperscaler demand.Enterprise switching orders rose over 40%, while campus networking orders increased more than 25%.Acacia secured over $1 billion in quarterly orders and is expected to grow more than 200% in fiscal 2026. Cisco Systems (CSCO - Free Report) shares have jumped 52% year to date (YTD), outperforming the broader Zacks Computer & Technology sector’s return of 14.7%. The company has been benefiting from a strong AI push, a networking supercycle, improving its enterprise networking business and recovering its security business. These factors have helped in improving Cisco’s competitive prowess compared with the likes of Hewlett Packard Enterprise (HPE - Free Report) , Broadcom (AVGO - Free Report) and Arista Networks (ANET - Free Report) , shares of which have appreciated 106.4%, 39.4% and 12.6%, YTD, respectively. Is there room for further upside in Cisco shares? Let’s find out.
CSCO Stock’s Price Performance
Image Source: Zacks Investment Research
AI Push & Strong Networking Growth Aids Cisco’s ProspectsCisco’s growing AI infrastructure business has been a major growth driver. The company raised its fiscal 2026 AI infrastructure order target from $5 billion to approximately $9 billion, reflecting stronger-than-expected hyperscaler demand. Cisco secured five new hyperscaler AI design wins during the third quarter of fiscal 2026, including Silicon One-powered systems and Acacia optical networking products. This reinforces investor confidence that the AI networking opportunity is expanding beyond a handful of deployments. Cisco now expects to recognize approximately $4 billion in AI infrastructure revenues from hyperscalers in fiscal 2026. The company expects at least $6 billion of AI-related revenues in fiscal 2027, indicating strong visibility into future growth.
Cisco is a key beneficiary of the networking supercycle as hyperscalers, enterprises, sovereign cloud operators, public-sector organizations and telecom providers modernize networks simultaneously to support AI workloads. The company believes this demand is larger and faster than previous technology cycles because AI infrastructure cannot function without modern, high-speed networking. In the third quarter of fiscal 2026, enterprise data center switching orders grew more than 40%, campus networking orders reached record levels (up more than 25%), and wireless orders increased more than 40% year over year.
The Acacia optics business generated more than $1 billion of orders in the third quarter of fiscal 2026 and is expected to grow over 200% in fiscal 2026, positioning Cisco to capture a larger share of AI networking spend. The business has shipped more than 750,000 400G coherent optics and over 40,000 800G coherent optics, giving Cisco leadership in AI optical interconnects. Meanwhile, Silicon One continues winning large hyperscaler deployments, strengthening Cisco's competitive position in AI networking.
The company’s refreshed security portfolio is gaining traction, with double-digit order growth in core security products (excluding Splunk) and strong firewall momentum. Cisco is leveraging its unique position across networking, security, identity and observability to address emerging AI security needs, including agentic AI security, AI Defense, Hypershield and Zero Trust Access. Cisco has also expanded its Secure AI Factory with NVIDIA and announced acquisitions of Galileo and Astrix to strengthen AI identity and agentic security capabilities.
Cisco’s Prospects: Key Catalysts Outweigh ChallengesCisco’s prospects are likely to benefit from accelerating AI networking demand. Continued expansion of Silicon One, Acacia optics and AI switching is expected to support another leg of growth. A strong pipeline of AI infrastructure buildout ($3 billion roughly) across enterprise, sovereign AI and neocloud customers suggests that AI demand is broadening beyond hyperscalers. Cisco believes campus upgrades remain in the early innings as enterprises migrate to Wi-Fi 7, AI-enabled switching and secure networking.
In terms of the Security business, Cisco expects easier comparisons beginning in fiscal 2027 as Splunk’s cloud transition normalizes. Combined with stronger adoption of Hypershield, AI Defense and Zero Trust, Security could become a faster growth contributor. Strong adoption of agentic AI bodes well for Cisco’s prospects. The company believes that agentic AI requires security to be embedded directly into networking infrastructure, an area where Cisco has a competitive advantage over pure networking or standalone cybersecurity vendors.
These positive drivers are expected to help Cisco comfortably navigate challenges related to higher memory prices, Splunk’s cloud transition, stiff competition and heightened AI-related spending.
2026 Earnings Estimate Revisions Positive for CSCOThe Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is currently pegged at $4.28 per share, up 0.9% over the past 60 days, indicating year-over-year growth of 12.3%.
The consensus mark for CSCO’s fourth-quarter fiscal 2026 earnings is currently pegged at $1.17 per share, up a penny over the past 60 days, indicating year-over-year growth of 18.2%.
CSCO Shares Are Trading at a PremiumCisco shares are trading at a premium, as suggested by the Value Score of F. In terms of the forward 12-month price/sales, CSCO is trading at a premium of 6.83X, higher than the broader sector’s 6.79X and Hewlett Packard Enterprise’s 1.35X.
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 17.8X and 12.18X, respectively.
CSCO Stock’s Valuation
Image Source: Zacks Investment Research
ConclusionDespite trading at a modest premium, Cisco’s improving fundamentals and expanding AI opportunity continue to support a constructive long-term outlook. Strong momentum in AI infrastructure, Silicon One, Acacia optics, campus networking and security, combined with rising earnings estimates and solid execution, provides multiple avenues for sustained growth. CSCO remains an attractive stock for investors seeking long-term exposure to enterprise networking and AI infrastructure driven by durable demand drivers and increasing revenue visibility.
CSCO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the latest trading session, Cisco Systems (CSCO - Free Report) closed at $117.09, marking a -1.81% move from the previous day. This move lagged the S&P 500's daily gain of 0.38%. Elsewhere, the Dow gained 0.02%, while the tech-heavy Nasdaq added 0.9%.
Heading into today, shares of the seller of routers, switches, software and services had lost 0.77% over the past month, outpacing the Computer and Technology sector's loss of 1.5% and lagging the S&P 500's gain of 1.27%.
The investment community will be closely monitoring the performance of Cisco Systems in its forthcoming earnings report. The company is predicted to post an EPS of $1.17, indicating a 18.18% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $16.85 billion, indicating a 14.86% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.28 per share and revenue of $62.95 billion. These totals would mark changes of +12.34% and +11.11%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Cisco Systems. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Cisco Systems is currently sporting a Zacks Rank of #1 (Strong Buy).
In terms of valuation, Cisco Systems is currently trading at a Forward P/E ratio of 27.85. This expresses a premium compared to the average Forward P/E of 20.67 of its industry.
It is also worth noting that CSCO currently has a PEG ratio of 2.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Computer - Networking industry was having an average PEG ratio of 1.88.
The Computer - Networking industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 181, placing it within the bottom 27% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in CSCO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
SentinelOne (NYSE:S | S Price Prediction) has quietly become one of the most digestible strategic assets in cybersecurity. With a market cap of roughly $6.1 billion, $1.16 billion in annual recurring revenue (ARR) growing 23% year over year, and a balance sheet carrying a 0.0 debt-to-equity ratio, the company checks every box on an acquirer’s diligence list.
CEO Tomer Weingarten framed the platform pitch bluntly: “Businesses of all sizes, including the world’s largest enterprises, are standardizing on the Singularity platform as the foundation for securing AI and autonomous cybersecurity.” Emerging solutions across Data, AI, and Cloud now represent 50% of total ARR, and the platform holds FedRAMP High authorization. Citron Research already calls the stock “deeply mispriced” and has a $32 price target. Shares closed most recently at $17.88.
4. Microsoft: Strongest Product Fit, Weakest Regulatory Path Microsoft (NASDAQ:MSFT) has the firepower, with an AI business at a $37 billion annual run rate, up 123% year over year. But Defender already dominates endpoint. Absorbing a top rival would draw immediate antitrust scrutiny, making this the least likely path despite the cleanest technical fit.
3. Amazon: Cash Rich, Build-First Culture Amazon (NASDAQ:AMZN) could write the check without blinking, sitting on $101.8 billion in cash. AWS grew 28%, its fastest in 15 quarters, per CEO Andy Jassy. Yet Amazon historically prefers organic security tooling. A partnership expansion is more probable than a full acquisition.
2. Alphabet: The Mandiant Playbook, Extended Alphabet (NASDAQ:GOOGL) is racing to close the cloud gap, with Google Cloud revenue up 63% to $20.03 billion and backlog near $460 billion. Sundar Pichai says, “Our AI investments and full-stack approach are lighting up every part of the business.” Google has demonstrated willingness to pay premium prices for security assets. Purple AI plus FedRAMP High would strengthen GCP’s federal push (see the AI Power Seven report for related plays).
1. Cisco: The Cleanest Strategic Case Cisco Systems (NASDAQ:CSCO) has the sharpest hole to fill. Security revenue was $2.01 billion, flat year over year, even as networking jumped 25%. Chuck Robbins framed the ambition: “Cisco is well-positioned as the critical infrastructure for the AI era.” With a restructuring already funding security investment and shares up 57.5% year to date, Cisco has both the currency and the motive.
What About Private Equity? A Thoma Bravo-style take-private is plausible given SentinelOne’s $75.9 million in FY26 free cash flow and its clean balance sheet. But sponsors typically pay lower multiples than strategics chasing AI-security synergies. PE ranks as more likely than Microsoft but less likely than the three cloud and networking strategics.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Cisco Systems (CSCO - Free Report) closed the most recent trading day at $113.82, moving +1.82% from the previous trading session. The stock's performance was ahead of the S&P 500's daily loss of 0.28%. Elsewhere, the Dow saw a downswing of 1.09%, while the tech-heavy Nasdaq appreciated by 0.2%.
Coming into today, shares of the seller of routers, switches, software and services had lost 7.12% in the past month. In that same time, the Computer and Technology sector lost 1.22%, while the S&P 500 gained 1.64%.
Investors will be eagerly watching for the performance of Cisco Systems in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.17, indicating a 18.18% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.85 billion, up 14.86% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $4.28 per share and a revenue of $62.95 billion, demonstrating changes of +12.34% and +11.11%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Cisco Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Cisco Systems presently features a Zacks Rank of #1 (Strong Buy).
Digging into valuation, Cisco Systems currently has a Forward P/E ratio of 26.11. This denotes a premium relative to the industry average Forward P/E of 19.66.
Investors should also note that CSCO has a PEG ratio of 2.35 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Computer - Networking industry had an average PEG ratio of 1.74 as trading concluded yesterday.
The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 81, putting it in the top 33% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Motley Fool co-founder and CEO Tom Gardner shares five long-term stock ideas -- but first lays out three "outrageous" statements about how he believes investors should approach today's market.
Also in this video:
Why Gardner thinks the average investor should own at least fifty stocks -- and how Peter Lynch's record supports it. How AI agents are reshaping investment research, and why a long-term orientation still wins. Five picks across the risk spectrum, from cautious to aggressive. Five companies Gardner highlights for a diversified, long-term portfolio: Cisco Systems (CSCO +1.31%), MSCI (MSCI 1.75%), Kingstone Companies (KINS 1.23%), Marvell Technology (MRVL 1.31%), and BillionToOne (BLLN 3.01%).
A full transcript is below the video.
This video was published on July 7, 2026.
Hello, Foolish investors. I'm Tom Gardner, co-founder and CEO of The Motley Fool, and I'm here with five stocks for you to invest in for the long term. But before I present those five companies, I'm going to say three outrageous things about investing, and you can decide whether you agree.
The first is that after thirty years serving members around the world -- tens of millions of people working to make better investment decisions and to live smarter, happier, and richer lives -- we've concluded from all that data that it's a very good idea for the average individual investor to own at least fifty stocks.
I know there will be protests in the comments. Fifty stocks? That sounds like an index fund. Why would I ever do that? Well, there is so much disruption and so many questions about resiliency to AI. It's going to roll across every industry, and running a concentrated portfolio through that seems quite risky to me.
Fifty also seems like a lot until you remember that Peter Lynch held more than five hundred companies at Fidelity Magellan and delivered twenty-nine percent annualized returns for more than a decade. Plenty of very successful investors have owned hundreds of companies and still beaten the market. The reason is that there are forty thousand public companies in the world, and over any rolling 10-year period, about four thousand of them drive most of the upside. The majority will be mediocre, marginal, or outright losers -- it's the top ten percent that win. But out of forty thousand companies, that still leaves four thousand great businesses to choose from. And you can't find fifty? Of course you can.
The second outrageous thing is that we're moving into a completely new world of investing. The methodical way that fundamental and technical analysts look at one company after another is being transformed. The Motley Fool started in 1993, and we watched the shift from magazines, newspapers, and print subscriptions mailed once a quarter to a world that moved online -- real-time information for free, the ability to talk to investors around the world, and investment clubs that scaled to millions of people. That transformation changed the way we invested. This one is even more dramatic. We may be in just the second or third inning, but soon you'll have teams of AI agents doing research for you night and day, following more companies and understanding more twists and turns in the categories you care about most. If you don't have those systems working on your behalf, you're going to be at a disadvantage.
The Motley Fool is making substantial investments in building out AI scoring systems to find businesses that make sense as long-term investments. We're not competing on day trading or speculative high-frequency trading, and we're not here to predict where the market or Bitcoin will be in the next six months. We look out five, ten, and twenty years, because the vast majority of money made in the equity markets is made by business owners -- the CEOs and founders with large equity stakes. Every one I've met, whether Herb Kelleher at Southwest Airlines, Jim Sinegal at Costco, or Howard Schultz at Starbucks, and dozens more over these thirty years, none of them cared about their stock's performance over ninety days. When their stock was down twenty percent in a given year, that wasn't on their priority list of things needed to build a great business.
So a long-term-anchored, AI-powered scoring system is going to help us find the future Netflixes, Teslas, and Googles. Consider Nvidia: it has fallen fifty percent four times since our Rule Breakers team first recommended it at what is now $0.16 a share in 2005. The stock has risen thirteen hundred times in value since then, and it was never sold. That's why some Motley Fool members can say, "I put in five thousand dollars, and I have six million dollars in Nvidia." That's what a 1,300x return does -- and you don't get it by fishing for minnows day to day. It comes from buying companies and holding them for very long periods.
The last thing I'll say is that most of us probably feel we're in a pricey market. Remember that when large IPOs come public one after another, those are some of the best-informed businesses in history choosing this moment to sell equity to the public -- an indication that we're in richly priced territory. For that reason, three of these five recommendations carry a risk profile inside The Motley Fool of cautious, one is ranked moderate, and only one is scored aggressive. Tilting toward cautious and moderate makes sense right now.
The first recommendation is the long-standing Cisco Systems. This was the backbone of the internet twenty-five years ago; the market peaked and the stock never really came back. But here it is, providing networking equipment to connect data centers, with a healthy security business growing out of its Splunk acquisition. It has thirteen billion dollars in free cash flow and double-digit return on assets -- very efficient with its capital. Leadership has shown it can sit at the center of the most dramatic technical transformations in history while running a disciplined financial story. We first recommended it in Hidden Gems at forty-nine dollars in 2024; the stock's now at one hundred twenty. I think we can get twelve to fourteen percent annualized from Cisco over the next five years.
The second company, also cautious, is MSCI. It provides global benchmarks for institutional investors -- if you run an ETF or fund and need an index to measure your performance against, MSCI creates those indexes, and it builds the underlying index for many index funds too. Institutions pay on a subscription basis, so it's recurring, highly profitable revenue, with over a billion dollars in free cash flow and unbelievable rates of return on invested capital. A very well-managed business.
The third company is one probably no one here has heard of: a very small homeowners insurance company called Kingstone Companies. In 2019, Merrill Golden joined as chief operating officer, and about four years later the succession plan advanced and she became CEO. She fixed a troubled, nearly broken insurer whose stock had fallen below a dollar a share; it's now around fifteen dollars -- an amazing return over just two and a half years. The company now runs an eighty-eight percent combined ratio, meaning it earns a twelve percent profit margin on the contracts it writes, mostly homeowners insurance in New York, but it's now expanding into Connecticut and, most importantly, California, where many insurers are pulling back from wildfire risk. Kingstone is stepping in because it believes it can price that risk correctly. It's a tiny company and the stock could be volatile, but it's cautiously rated because it's a very disciplined insurer with a CEO doing an outstanding job.
Those first three -- Cisco, MSCI, and Kingstone -- are all cautious, a reminder that The Motley Fool believes we should always be investing in any market environment. When stocks collapse and the S&P 500 falls thirty percent, which happens about once a decade, we have to be prepared. That's often when we look for aggressive positions in great growth businesses whose stocks have been discarded and are down sixty percent even though their prospects look very bright. When markets are richly priced, we prefer caution -- which is why the first three here are cautious.
Let's finish with a moderate and an aggressive idea. My moderate pick is Marvell Technology. Data has to move very quickly between servers and data centers, and that requires custom chips. Think of Nvidia's GPUs as the engine and Marvell's chips as the highways and tunnels. Within a couple of years, Marvell will have six billion dollars in free cash flow. Jensen Huang recently said he believes Marvell could be the next trillion-dollar company; it's capitalized at two hundred fifty billion today, so that would mean a 4x. My belief is that takes a decade -- but if Jensen Huang thinks it'll take less, I'm betting on Jensen Huang.
The fifth and final recommendation is an aggressive classification: BillionToOne. It sounds aggressive, doesn't it? You'd think you'd need some obnoxious, narcissistic, risk-taking founder to name a company BillionToOne. But the name comes from having the most advanced genetic testing for prenatal and oncology testing -- effectively looking for a tiny signal among three billion base pairs in DNA, trying to find the one molecule that flags a problem so a patient can get treatment. The two founders were Princeton-trained scientists with deep engineering backgrounds. It's a tactically advanced and deeply mission-driven business. If you read about the company and its founders, you're going to want to own shares -- even one or three shares just to get started. It usually doesn't matter in the long term how much money you start with; it's the discipline you bring to the portfolio you're building.
We're in a richly priced market, and it will be a volatile one. But if you tilt toward some cautious investments and build a well-rounded fifty-plus-stock portfolio, I think you'll be very happy with your Foolish returns. Thank you for entertaining these ideas. I look forward to your comments below, and of course we always hope you'll like and subscribe to every Motley Fool video you watch. We look forward to serving you and helping you live a smarter, happier, and richer life for many decades to come. Fool on.
Cisco Systems (CSCO - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this seller of routers, switches, software and services have returned -8.2%, compared to the Zacks S&P 500 composite's +2.1% change. During this period, the Zacks Computer - Networking industry, which Cisco falls in, has lost 6.1%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Cisco is expected to post earnings of $1.17 per share, indicating a change of +18.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $4.28 points to a change of +12.3% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $4.78 indicates a change of +11.6% from what Cisco is expected to report a year ago. Over the past month, the estimate has changed +0.2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Cisco is rated Zacks Rank #1 (Strong Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Cisco, the consensus sales estimate for the current quarter of $16.85 billion indicates a year-over-year change of +14.9%. For the current and next fiscal years, $62.95 billion and $67.75 billion estimates indicate +11.1% and +7.6% changes, respectively.
Last Reported Results and Surprise HistoryCisco reported revenues of $15.84 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $1.06 for the same period compares with $0.96 a year ago.
Compared to the Zacks Consensus Estimate of $15.58 billion, the reported revenues represent a surprise of +1.71%. The EPS surprise was +1.92%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Cisco is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Cisco. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
Key Takeaways CSCO's networking business is benefiting from AI infrastructure demand and modernization.Networking product orders jumped more than 50%, marking seven straight quarters of double-digit growth.CSCO raised fiscal 2026 revenue and earnings outlooks as AI and cloud demand accelerate. Cisco Systems’ (CSCO - Free Report) networking business is emerging as one of its strongest growth engines, supported by accelerating AI infrastructure investments, enterprise network modernization and rising bandwidth requirements. Management believes that the industry is entering a "networking super cycle," driven by hyperscaler AI deployments, enterprise AI adoption, sovereign cloud investments and public-sector infrastructure upgrades. As AI workloads become more distributed and bandwidth-intensive, networking is becoming the foundation of AI infrastructure rather than just a connectivity layer.
The improving demand environment offers an excellent growth opportunity for CSCO. In third-quarter fiscal 2026, networking product orders jumped more than 50% year over year, marking the seventh consecutive quarter of double-digit growth. Product revenues from networking increased 25%, driven by AI infrastructure, campus refresh projects, data center switching, wireless and service-provider routing.
Campus networking orders climbed more than 25%, while data center switching orders rose more than 40%, reflecting growing enterprise investments to prepare networks for AI-driven traffic growth. Cisco expects a multi-year, multi-billion-dollar campus refresh cycle as enterprises replace aging infrastructure with AI-ready networking platforms.
Cisco is also strengthening its competitive position through differentiated networking technologies. Silicon One has become a strategic advantage, enabling the company to provide custom silicon, systems and software tailored to hyperscaler requirements while reducing dependence on merchant silicon. Management noted that Silicon One is central to its AI networking strategy, with new hyperscaler design wins across scale-up and scale-out AI deployments.
At the same time, Acacia optics continues to benefit from the rapid expansion of AI clusters, generating more than $1 billion in quarterly orders as demand for coherent optical interconnects accelerates.
Cisco Offers Positive GuidanceCisco appears well-positioned to capitalize on sustained networking demand. Management expects AI infrastructure orders from hyperscalers to reach $9 billion in fiscal 2026, while growing enterprise, sovereign cloud and neocloud deployments should provide an additional long-term growth avenue.
For fiscal 2026, Cisco raised its outlook to revenues of $62.8 billion to $63 billion, and non-GAAP earnings of $4.27-$4.29 per share. The company also announced a restructuring plan to reallocate resources toward silicon, optics, security and AI, and expects up to $1 billion of pretax charges, including roughly $450 million in the fourth quarter of fiscal 2026, with the remainder in fiscal 2027.
CSCO Faces Tough CompetitionCisco is facing stiff competition from Arista Networks (ANET - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) . Both Arista Networks and HPE are expanding their footprint in the networking domain.
Arista is a leader in high-speed Ethernet switching, particularly 100G, and is benefiting from rising demand for 800G and faster networking. Growth is driven by large data center expansions supporting distributed computing and cloud infrastructure. Arista’s software stack, including EOS, CloudVision and AVD, simplifies network management. Customers include cloud providers, enterprises and telecom companies expanding across industries like manufacturing, insurance and telecom.
Hewlett Packard Enterprise focuses on AI, industrial IoT and distributed computing as the next major growth markets. The company sees these areas as key drivers of future infrastructure demand. The acquisition of Juniper Networks has strengthened Hewlett Packard Enterprise’s position in networking, expanding its capabilities across AI, cloud and hybrid environments. This has helped improve its competitive position in large-scale modern infrastructure deployments.
CSCO’s Share Price Performance, Valuation & EstimatesCisco shares have appreciated 46.3% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 14.6%.
CSCO Stock Outperforms Sector
Image Source: Zacks Investment Research
The Cisco stock is trading at a premium, with a forward 12-month price/earnings of 23.77X compared with the broader sector’s 22.73X. CSCO has a Value Score of F.
CSCO’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is currently pegged at $4.28 per share, up 2.6% over the past 30 days, suggesting 12.3% growth from the fiscal 2025 reported figure.
Cisco currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Investors interested in Computer and Technology stocks should always be looking to find the best-performing companies in the group. Cisco Systems (CSCO - Free Report) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.
Cisco Systems is a member of the Computer and Technology sector. This group includes 613 individual stocks and currently holds a Zacks Sector Rank of #1. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Cisco Systems is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for CSCO's full-year earnings has moved 3.8% higher within the past quarter. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
According to our latest data, CSCO has moved about 46.3% on a year-to-date basis. At the same time, Computer and Technology stocks have gained an average of 14.6%. As we can see, Cisco Systems is performing better than its sector in the calendar year.
Another stock in the Computer and Technology sector, Arteris, Inc. (AIP - Free Report) , has outperformed the sector so far this year. The stock's year-to-date return is 126.2%.
In Arteris, Inc.'s case, the consensus EPS estimate for the current year increased 20.6% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, Cisco Systems belongs to the Computer - Networking industry, a group that includes 7 individual companies and currently sits at #80 in the Zacks Industry Rank. On average, this group has gained an average of 46.3% so far this year, meaning that CSCO is slightly underperforming its industry in terms of year-to-date returns.
On the other hand, Arteris, Inc. belongs to the Internet - Software industry. This 175-stock industry is currently ranked #78. The industry has moved -9.9% year to date.
Investors interested in the Computer and Technology sector may want to keep a close eye on Cisco Systems and Arteris, Inc. as they attempt to continue their solid performance.
Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) has quietly become one of the most compelling AI infrastructure plays in the market, even as retail chatter has turned sour.
The company just posted record quarterly revenue of $15.8 billion, raised full-year guidance, and told investors it now expects to book $9 billion in AI infrastructure orders from hyperscalers in FY26. Yet Reddit sentiment sits firmly bearish. Our proprietary model sides with management.
The 24/7 Wall St. price target for Cisco is $133.66, implying 13.79% upside from the current $117.46. Our recommendation is buy, with confidence at 90%.
24/7 Wall St. Price Target Summary Metric Value Current Price $117.46 24/7 Wall St. Price Target $133.66 Upside 13.79% Recommendation BUY Confidence Level 90% The Stock Has Nearly Doubled Since April Cisco is up 54.12% year to date and 73.17% over the past year, though shares have cooled 3.05% over the last week and trade about 10% off the 52-week high of $130.37.
The catalyst was the May 13 earnings release, where CSCO delivered its fourth consecutive EPS beat at $1.06 and revenue growth of 11.96% year over year. The stock jumped 13.41% on earnings day. Networking revenue surged 25%, and total product orders climbed 35%. Management raised FY26 revenue guidance to $62.8 billion to $63 billion and EPS to $4.27 to $4.29.
The Case for $140+ The bull case rests on AI infrastructure durability. CFO Mark Patterson told analysts “it’s reasonable to expect we will recognize at least $6 billion of revenue in FY ’27” from hyperscale AI alone. Acacia optics orders topped $1 billion in Q3, and Cisco booked five new Silicon One design wins with hyperscalers.
CEO Chuck Robbins said “Cisco is well-positioned as the critical infrastructure for the AI era.” Enterprise data center switching orders jumped over 40%, and public sector orders rose 27%. Our bull scenario points to $140.03, a 19.22% return.
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The Risks Worth Watching The trailing P/E of 38 is rich for a company whose long-term model is 4% to 6% growth in totality. Non-GAAP gross margins compressed 260 basis points on AI hardware mix, and Cisco is absorbing up to $1 billion in restructuring charges. Hyperscaler concentration is real: strip out webscale and order growth was 19%, of which 4 to 5 percentage points came from price increases rather than unit growth.
Insider activity has skewed net selling across 44 recent transactions. That said, bulls would note Patterson said “gross margins have stabilized” and the restructuring reinvests into silicon and optics, where Cisco is winning. Our bear case lands at $111.02.
Cisco Price Prediction 2026-2030 The 24/7 Wall St. price target of $133.66 reflects a buy with 90% confidence. The scale tips on AI order momentum: a jump to $9 billion of hyperscaler orders from an initial $5 billion plan represents a real backlog with a $6 billion FY27 revenue floor.
The bullish thesis holds if hyperscaler capex sustains through 2027 and Silicon One keeps taking share. The bearish scenario plays out if enterprise pull-forward reverses in FY27 or memory costs re-inflate.
Year 24/7 Wall St. Price Target 2026 $133.66 2027 $145.00 2028 $158.00 2029 $170.00 2030 $180.89 These projections assume Cisco continues executing on its AI infrastructure roadmap and campus refresh cycle. Significant upside or downside could result from hyperscaler capex trends and Silicon One share gains.
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Investors might want to bet on Cisco Systems (CSCO - Free Report) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.
A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.
Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.
Therefore, the Zacks rating upgrade for Cisco basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Cisco imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for CiscoThis seller of routers, switches, software and services is expected to earn $4.28 per share for the fiscal year ending July 2026, which represents no year-over-year change.
Analysts have been steadily raising their estimates for Cisco. Over the past three months, the Zacks Consensus Estimate for the company has increased 3.8%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Cisco to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
In the latest close session, Cisco Systems (CSCO - Free Report) was down 1.16% at $119.74. This change lagged the S&P 500's 0.1% loss on the day. Elsewhere, the Dow gained 0.35%, while the tech-heavy Nasdaq lost 0.43%.
The stock of seller of routers, switches, software and services has risen by 2.38% in the past month, leading the Computer and Technology sector's loss of 2.15% and the S&P 500's loss of 1.34%.
Analysts and investors alike will be keeping a close eye on the performance of Cisco Systems in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.17, signifying a 18.18% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $16.85 billion, up 14.86% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.28 per share and revenue of $62.95 billion. These totals would mark changes of +12.34% and +11.11%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cisco Systems. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.45% higher within the past month. Cisco Systems currently has a Zacks Rank of #2 (Buy).
Digging into valuation, Cisco Systems currently has a Forward P/E ratio of 28.3. For comparison, its industry has an average Forward P/E of 28.01, which means Cisco Systems is trading at a premium to the group.
It's also important to note that CSCO currently trades at a PEG ratio of 2.55. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. CSCO's industry had an average PEG ratio of 2.03 as of yesterday's close.
The Computer - Networking industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 42, putting it in the top 18% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Let's take a look at what these Wall Street heavyweights have to say about Cisco Systems (CSCO - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Cisco currently has an average brokerage recommendation (ABR) of 1.87, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 26 brokerage firms. An ABR of 1.87 approximates between Strong Buy and Buy.
Of the 26 recommendations that derive the current ABR, 14 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 53.9% and 3.9% of all recommendations.
Brokerage Recommendation Trends for CSCO
Check price target & stock forecast for Cisco here>>>
While the ABR calls for buying Cisco, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in CSCO?In terms of earnings estimate revisions for Cisco, the Zacks Consensus Estimate for the current year has increased 0.5% over the past month to $4.28.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Cisco. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Cisco may serve as a useful guide for investors.
Emerging from Stealth, Tenet uses patent-pending Agent-side Simulation technology to predict and stop malicious AI agent behavior in real time before it reaches enterprise systems
WILMINGTON, Del.--(BUSINESS WIRE)--Tenet Security, a cybersecurity company focused on securing autonomous AI agents, today emerged from stealth with $6 million in seed funding led by The Westly Group, an early investor in SentinelOne, and MizMaa Ventures. The company is built around a patent-pending technology called Agent-side Simulation, which predicts and simulates an agent’s likely next actions before they execute against production systems. If a path appears risky, Tenet can intervene before damage occurs while providing a trace explaining why the action was blocked.
Founded by veteran offensive security researchers Barak Sternberg and Nevo Poran, Tenet was created to address a growing challenge facing enterprises: AI agents are increasingly being granted access to critical systems, data, and workflows, while existing security tools lack visibility into what those agents actually do once deployed. Traditional security tools can monitor users, endpoints, or prompts, but often lack visibility into how agents behave once they begin taking actions on their own.
As organizations move beyond chatbots and begin deploying autonomous agents capable of writing code, accessing databases, interacting with applications, and making decisions on their own, security teams are struggling to monitor and control these new machine identities in real time.
"AI agents may be the biggest productivity unlock enterprises have seen in decades, which is why organizations are moving so quickly to deploy them," said Barak Sternberg, co-founder and CEO of Tenet Security. "But we're also entering a world where autonomous agents are interacting with systems, data, and other agents in ways most security tools were never designed to understand. That creates an entirely new security layer that requires a fundamentally different approach to protection."
Before launching Tenet, Sternberg and Poran helped build Cisco's AI Defense and led some of the company's early work on threats targeting autonomous AI systems. Prior to Cisco, the pair founded Wild Pointer, a cybersecurity company that served Fortune 500 customers and scaled to a seven-figure annual revenue business. Both founders are speakers at major security conferences, including DEF CON and Black Hat.
As enterprises rushed to deploy AI agents, Sternberg and Poran became convinced that existing security tools were largely blind to what those agents actually do once they're put to work. The founders concluded that the industry's biggest AI security challenge would not be protecting models, but controlling what autonomous agents do after they are granted access to real systems, data, and workflows.
That conviction ultimately led them to leave and launch Tenet Security.
Tenet's goal is to help enterprises deploy autonomous agents at scale without introducing unmanaged security risk, giving security teams greater confidence to support AI adoption across the organization. Its platform is focused on securing AI agents at runtime and is designed to prevent threats, including unauthorized access, data exfiltration, agent manipulation, and what the company calls "Agentjacking,” where malicious instructions embedded in emails, logs, documents, databases, or other data sources can adversely change an agent's behavior with potentially catastrophic effects. Unlike traditional security tools that generate alerts after suspicious activity occurs, Tenet is designed to intervene before an agent's action is executed.
The company's launch follows research from Tenet Threat Labs demonstrating Agentjacking, a new class of attack that manipulates AI agents into executing attacker-controlled actions. In testing, the research team validated the technique across more than 100 enterprise environments and found thousands of organizations potentially exposed through publicly accessible attack paths. According to Tenet, the technique operated without triggering traditional security controls because the agents were acting within their authorized permissions.
Tenet says early deployments have already demonstrated the operational challenges organizations face as AI agent usage expands. One $1 billion ARR legal-sector enterprise increased its use of AI agents from two deployments to more than twenty over a six-month period while using Tenet's platform. According to the company, more than ten attempted attacks, including a critical XSS attack, were detected and blocked during that period. In another Fortune 1000 enterprise deployment, Tenet identified a runaway AI agent generating tens of thousands of dollars in unnecessary token consumption over a single weekend before it could be scaled more broadly.
“We're increasingly seeing AI agents become part of the attack path itself," said Nevo Poran, co-founder and CTO of Tenet Security. "Attackers can manipulate agents to access sensitive data, abuse privileges, or take actions on their behalf in ways traditional security tools were never designed to detect. The challenge isn't simply monitoring prompts or API traffic, but understanding and controlling agent behavior in real time. The only place left to catch these threats is at runtime, in the moment an agent decides to act,” Poran added.
The funding will support continued product development, expansion of Tenet Threat Labs, growth of the company's North American go-to-market operations, and broader coverage across emerging AI agent frameworks and enterprise environments.
Tenet enters the market as enterprise adoption of autonomous AI agents accelerates. According to the company, organizations have as many as 5x more AI agents running than security teams realize, creating visibility and governance challenges that traditional security controls were not designed to address.
The company is advised by David Schwed, former CISO of Robinhood; Rick Scott, former CISO of BNY; Israel Bryski, former CISO of MIO Partners; Tomer Schwartz, co-founder at Dazz; Lior Tal, former CEO of Coralogix; and other cybersecurity and enterprise technology leaders.
Tenet Security is headquartered in North America and works with enterprises deploying AI agents across development, operations, and business workflows.
About Tenet Security
Tenet Security is the security platform for the agentic layer. The company helps enterprises discover, assess, and protect autonomous AI agents operating across their environments. Founded by veteran offensive security researchers Barak Sternberg and Nevo Poran, Tenet enables organizations to deploy AI agents at scale by providing visibility, runtime protection, and threat prevention for agent-driven workflows.
The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Cisco Systems (CSCO - Free Report) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.
Cisco Systems is one of 592 individual stocks in the Computer and Technology sector. Collectively, these companies sit at #2 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Cisco Systems is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for CSCO's full-year earnings has moved 3.9% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that CSCO has returned about 55.2% since the start of the calendar year. At the same time, Computer and Technology stocks have gained an average of 18.2%. This means that Cisco Systems is performing better than its sector in terms of year-to-date returns.
Another stock in the Computer and Technology sector, Arteris, Inc. (AIP - Free Report) , has outperformed the sector so far this year. The stock's year-to-date return is 168.1%.
Over the past three months, Arteris, Inc.'s consensus EPS estimate for the current year has increased 20.6%. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, Cisco Systems is a member of the Computer - Networking industry, which includes 7 individual companies and currently sits at #42 in the Zacks Industry Rank. Stocks in this group have gained about 55.1% so far this year, so CSCO is performing better this group in terms of year-to-date returns.
In contrast, Arteris, Inc. falls under the Internet - Software industry. Currently, this industry has 170 stocks and is ranked #86. Since the beginning of the year, the industry has moved -11.6%.
Cisco Systems and Arteris, Inc. could continue their solid performance, so investors interested in Computer and Technology stocks should continue to pay close attention to these stocks.
ASHEVILLE, NC, June 18, 2026 (GLOBE NEWSWIRE) -- ASHEVILLE, NC - June 18, 2026 - -
Rhino Networks, LLC, a Cisco Meraki preferred partner, today shared insights from its leadership regarding Cisco's ongoing convergence of traditional networking and cloud-managed Meraki platforms into a unified portfolio, highlighting significant implications for small and medium-sized businesses navigating network modernization decisions.
Todd Carriker CEO of the company, addressed how Cisco's evolving strategy represents a fundamental shift in enterprise networking that has been developing since Cisco acquired Meraki over a decade ago. The convergence now manifests in newer product lines, including WiFi 7 access points and Catalyst 9350 switches, where the same hardware supports both Meraki cloud dashboard management and traditional on-premises Cisco management tools.
"The unification of Cisco's networking portfolio represents a pivotal moment for organizations evaluating their infrastructure strategies," stated Todd Carriker, CEO of Rhino Networks. "For the first time, businesses can select hardware without being locked into a specific management paradigm, allowing them to adapt their network management approach as their needs evolve. This flexibility is particularly valuable for SMBs that may start with cloud management but later require on-premises capabilities as they scale."
The Todd Carriker profile in the networking industry reflects extensive experience helping organizations navigate complex technology transitions. His perspective comes as businesses face increasing pressure to modernize their networks while maintaining operational flexibility and cost efficiency.
Historically, organizations faced a binary choice between Meraki's cloud-managed simplicity and Cisco's traditional enterprise-grade control. This separation often complicated procurement decisions and limited future flexibility. The new unified approach eliminates these constraints, enabling organizations to change management models without replacing hardware investments.
Todd Carriker's company Rhino Networks has observed firsthand how this convergence impacts deployment decisions across various industry sectors. The company specializes in helping organizations implement Cisco Meraki solutions and has maintained a 95 percent customer retention rate through its focus on comprehensive support and strategic guidance.
"SMBs are particularly well-positioned to benefit from this unified approach because it removes the traditional barriers between entry-level and enterprise-grade networking," added Carriker. "Organizations can now start with simplified cloud management and transition to more complex configurations as their requirements mature, all while maintaining the same hardware foundation."
The timing of these developments aligns with broader industry trends toward flexible consumption models and hybrid management approaches. According to Cisco's projections, 45 percent of the company's market opportunity by 2025 will involve managed services delivery, representing a $113 billion total addressable market.
Rhino Networks continues to expand its capabilities to support customers through this transition. The company offers comprehensive services including networking device sales, systems management, Cisco Meraki licensing, and deployment services. As an authorized reseller, Rhino Networks pre-configures equipment in transit, ensuring devices arrive ready for immediate deployment. The company's engineering team provides expertise in cloud security, deployment services, and maintains a two-hour response guarantee during business hours for customer support needs.
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For more information about Rhino Networks, LLC, contact the company here:
Cisco Systems (CSCO - Free Report) closed at $119.44 in the latest trading session, marking a +1.8% move from the prior day. The stock's change was more than the S&P 500's daily gain of 1.09%. Meanwhile, the Dow experienced a rise of 0.14%, and the technology-dominated Nasdaq saw an increase of 1.91%.
Shares of the seller of routers, switches, software and services have appreciated by 2.61% over the course of the past month, outperforming the Computer and Technology sector's gain of 0.22%, and the S&P 500's gain of 0.29%.
Investors will be eagerly watching for the performance of Cisco Systems in its upcoming earnings disclosure. The company is expected to report EPS of $1.17, up 18.18% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $16.85 billion, up 14.86% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $4.28 per share and revenue of $62.95 billion, indicating changes of +12.34% and +11.11%, respectively, compared to the previous year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cisco Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.45% upward. Cisco Systems is currently a Zacks Rank #2 (Buy).
Investors should also note Cisco Systems's current valuation metrics, including its Forward P/E ratio of 27.41. For comparison, its industry has an average Forward P/E of 27.29, which means Cisco Systems is trading at a premium to the group.
It's also important to note that CSCO currently trades at a PEG ratio of 2.47. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Computer - Networking industry stood at 1.98 at the close of the market yesterday.
The Computer - Networking industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 45, placing it within the top 19% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Key Takeaways CSCO shares trade at a premium, but AI demand and networking strength support the valuation.CSCO raised its fiscal 2026 AI infrastructure order target to about $9 billion on hyperscaler demand.CSCO expects fiscal 2026 revenues of $62.8-$63 billion and non-GAAP EPS of $4.27-$4.29. Cisco Systems (CSCO - Free Report) shares are trading at a premium, as suggested by the Value Score of F. In terms of the forward 12-month price/sales, CSCO is trading at a premium of 7.01X, higher than the Zacks Computer Networking industry’s 6.76X and Hewlett Packard Enterprise’s (HPE - Free Report) 1.3X. However, Cisco shares are trading at a discount compared with Arista Networks (ANET - Free Report) and Broadcom (AVGO - Free Report) . In terms of the forward 12-month P/S, Arista Networks and Broadcom shares are trading at 16.78X and 13.61X, respectively.
CSCO Stock’s Valuation
Image Source: Zacks Investment Research
So, is the Cisco stock a buy at this level? Let’s find out.
AI Push & Strong Networking Portfolio Aids Cisco’s ProspectsYear to date (YTD), CSCO shares have appreciated 55.2%, outperforming the broader Zacks Computer & Technology sector, as well as Broadcom and Arista Networks, but lagging Hewlett Packard Enterprise. The broader sector, Hewlett Packard Enterprise, Arista Networks and Broadcom have jumped 20%, 97.4%, 29.5% and 18.9%, respectively, over the same time frame.
CSCO Stock’s Price Performance
Image Source: Zacks Investment Research
The outperformance can be attributed to strong AI revenues. Cisco raised its fiscal 2026 AI infrastructure order target from $5 billion to approximately $9 billion, reflecting stronger-than-expected hyperscaler demand. YTD, AI infrastructure orders have already reached $5.3 billion, exceeding the original annual target with one quarter remaining. The company expects to recognize approximately $4 billion in AI infrastructure revenues from hyperscalers in fiscal 2026. Cisco expects at least $6 billion of AI-related revenues in fiscal 2027, indicating strong visibility into future growth.
Cisco is benefiting from a multi-year networking refresh cycle as third-quarter fiscal 2026 enterprise data center switching orders grew more than 40%, campus networking orders reached record levels, and wireless orders increased more than 40% year over year. CSCO believes AI-driven traffic growth will force enterprises to modernize networks over the next several years. The Acacia optics business generated more than $1 billion of orders in the third quarter of fiscal 2026 and is expected to grow over 200% in fiscal 2026, positioning Cisco to capture a larger share of AI networking spend.
The company’s refreshed security portfolio is gaining traction, with double-digit order growth in core security products and strong firewall momentum. The company is leveraging its unique position across networking, security, identity, and observability to address emerging AI security needs, including agentic AI security, AI Defense, Hypershield, and Zero Trust Access. Cisco’s management noted five consecutive quarters of high firewall win rates and expects security growth to improve exiting fiscal 2026.
Cisco’s proprietary Silicon One architecture has been a key differentiator. The company has secured multiple hyperscaler design wins and expects all high-end systems across its portfolio to be powered by Silicon One by fiscal 2029.
CSCO Offers Positive Q4 & FY26 GuidanceCisco expects non-GAAP earnings between $1.16 per share and $1.18 per share for the fourth quarter of fiscal 2026. Revenues are expected to be in the range of $16.7-$16.9 billion.
The Zacks Consensus Estimate for CSCO’s fourth-quarter fiscal 2026 revenues is pegged at $16.85 billion, indicating growth of 14.9% on a year-over-year basis. The consensus mark for CSCO’s earnings is currently pegged at $1.17 per share, unchanged over the past 30 days, indicating year-over-year growth of 18.2%.
For fiscal 2026, CSCO expects revenues to be in the $62.8-$63 billion range compared with $56.7 billion reported in fiscal 2025. Non-GAAP earnings are expected between $4.27 per share and $4.29 per share compared with $3.81 per share reported in fiscal 2025.
The Zacks Consensus Estimate for CSCO’s fiscal 2026 revenues is pegged at $62.95 billion, indicating growth of 11.1% from fiscal 2025. The consensus mark for CSCO’s fiscal 2026 earnings is currently pegged at $4.28 per share, up by a penny over the past 30 days, indicating year-over-year growth of 12.3%.
Here’s Why CSCO Stock is a Buy Right NowCisco is emerging as a major beneficiary of AI infrastructure spending, enterprise network modernization, AI security adoption, and its differentiated Silicon One platform. The company is seeing some of the strongest demand trends in its history, with broad-based order growth across networking, AI infrastructure, optics, and security. These trends are expected to help the stock rally and bode well for CSCO’s long-term prospects. These also justify the current premium valuation.
CSCO currently carries a Zacks Rank #2 (Buy), suggesting that it is the right time to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways DDOG is expanding its platform and AI observability capabilities, supporting customer adoption.CSCO strengthened observability through Splunk, growing ARR and subscription revenue.DDOG trades at a valuation premium to Cisco despite both benefiting from observability demand. Datadog (DDOG - Free Report) and Cisco Systems (CSCO - Free Report) are key players in the growing observability market, helping enterprises monitor and optimize complex IT environments. As cloud adoption, AI workloads and digital transformation initiatives accelerate, organizations are generating larger volumes of infrastructure, application and security data, driving demand for real-time monitoring and analytics solutions.
Observability platforms have become essential for maintaining performance, reliability and security across modern technology stacks. While Datadog offers a cloud-native observability platform, Cisco has strengthened its position through the Splunk acquisition, expanding its reach across observability, security and AI operations. Both companies are well-positioned to capitalize on the expanding observability opportunity.
Let's examine the fundamentals and growth drivers of both companies to determine which stock offers a better long-term investment opportunity.
The Case for DDOGDatadog continues to strengthen its position in observability through a platform expansion strategy that is driving higher customer adoption and spending. DDOG offers 26 products spanning infrastructure monitoring, application performance monitoring, log management, security and AI observability. This breadth has supported cross-selling momentum, with five products generating more than $100 million in annual recurring revenue (ARR) and three additional products contributing between $50 million and $100 million in ARR. Total ARR surpassed $4 billion in the first quarter of fiscal 2026, highlighting the increasing scale of the platform.
DDOG has been benefiting from strong enterprise demand. Revenues for first-quarter of fiscal 2026 increased 32% year over year, while free cash flow margin remained at 29%. Growth has been broad-based, with the non-AI customer cohort accelerating to the mid-20% range, indicating that demand extends beyond AI-native customers.
AI observability is emerging as a key catalyst. Datadog has expanded its capabilities through GPU Monitoring, LLM Observability and Bits AI offerings, enabling customers to manage complex AI environments. Adoption trends remain encouraging, with Datadog MCP Server tool calls quadrupling sequentially during the fiscal first quarter. DDOG is expanding security observability capabilities to address AI-specific threats while introducing deployment options that help customers meet data residency and compliance requirements.
Further growth is expected to be supported by FedRAMP High certification and a planned U.K. data center expansion. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $4.31 billion, indicating 25.7% year-over-year growth.
The Case for CSCOCisco has been strengthening its observability position through the integration of Splunk, enabling it to offer a broader platform spanning observability and security analytics. Unlike Datadog, Cisco benefits from a large installed base across networking, data center and security infrastructure, creating opportunities to embed observability capabilities deeper within enterprise environments. This integrated approach is expected to support cross-selling and customer retention as organizations increasingly seek unified visibility across their IT operations.
CSCO has also been benefiting from strong enterprise technology spending trends. In the third quarter of fiscal 2026, revenues increased 12% year over year to $15.8 billion, while product orders grew 35% year over year, reflecting broad-based demand across enterprise, public sector and cloud customers. Cisco's recurring revenue profile continues to strengthen, with ARR reaching $31.2 billion and subscription revenues accounting for 49% of total revenues.
Agentic security observability is emerging as a key catalyst. Cisco has been expanding capabilities that combine observability, threat detection and automated response across enterprise environments. Hypershield and AI Defense extend visibility across AI deployments, while the pending acquisitions of Galileo and Astrix are expected to add agentic identity, access management and behavior monitoring capabilities, strengthening the company's observability and security portfolio.
Further growth is likely to be supported by Cisco's expanding software mix, strong cash generation and deep enterprise relationships. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $62.95 billion, indicating 11.11% year-over-year growth.
DDOG vs. CSCO: Price Performance and ValuationYear to date, shares of CSCO have jumped 55.2%, trailing DDOG's 64% return. Both stocks have benefited from strong AI-related demand, with Datadog's gain led by its AI observability catalysts and Cisco's supported by its broader networking, security and AI infrastructure base.
DDOG Outperforms CSCO YTD
Image Source: Zacks Investment Research
DDOG currently trades at a forward 12-month price-to-sales (P/S) multiple of 16.86X, well above CSCO’s 7.01X. Datadog's premium to Cisco appears difficult to justify given Cisco's expanding observability footprint through Splunk, larger recurring revenue base, broader enterprise reach and growing software subscription business.
DDOG Vs CSCO : Forward 12-Month P/S Valuation
Image Source: Zacks Investment Research
ConclusionBoth Datadog and Cisco are well-positioned to capitalize on the growing observability opportunity. While Datadog continues to deliver robust growth, Cisco has significantly strengthened its position through the integration of Splunk. Given its larger recurring revenue base, broader enterprise footprint and more attractive valuation, CSCO appears to offer a more compelling investment opportunity than DDOG.
DDOG and CSCO carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Cisco Systems (CSCO - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this seller of routers, switches, software and services have returned +0.9% over the past month versus the Zacks S&P 500 composite's +0.1% change. The Zacks Computer - Networking industry, to which Cisco belongs, has gained 1.1% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Cisco is expected to post earnings of $1.17 per share, indicating a change of +18.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $4.28 points to a change of +12.3% from the prior year. Over the last 30 days, this estimate has changed +0.5%.
For the next fiscal year, the consensus earnings estimate of $4.73 indicates a change of +10.6% from what Cisco is expected to report a year ago. Over the past month, the estimate has changed +1.2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Cisco is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Cisco, the consensus sales estimate of $16.85 billion for the current quarter points to a year-over-year change of +14.9%. The $62.95 billion and $67.75 billion estimates for the current and next fiscal years indicate changes of +11.1% and +7.6%, respectively.
Last Reported Results and Surprise HistoryCisco reported revenues of $15.84 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $1.06 for the same period compares with $0.96 a year ago.
Compared to the Zacks Consensus Estimate of $15.58 billion, the reported revenues represent a surprise of +1.71%. The EPS surprise was +1.92%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Cisco is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Cisco. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
The U.S. Supreme Court further limited the reach of a federal law used to hold corporations liable for human rights abuses committed abroad, as it issued a ruling on Tuesday ending a lawsuit by members of the Falun Gong movement accusing Cisco Systems of facilitating religious persecution in China.
The Supreme Court on Tuesday issued a ruling that limits the use of a federal law to hold U.S. corporations liable for human rights abuses abroad when it dismissed a lawsuit that accused Cisco Systems of aiding the Chinese government's religious persecution of the Falun Gong movement.
The 6-3 ruling reversed a lower court's decision that had allowed a lawsuit filed by Falun Gong members in 2011 under the Alien Tort Statute of 1789.
The suit alleged that Cisco knowingly developed technology that enabled China's government to surveil and persecute Falun Gong members.
The Alien Tort Statute had been effectively dormant for nearly 200 years before lawyers started to use it in the 1980s to bring international human rights cases, and the Cisco suit questioned whether it can be used to hold corporations liable if they "aid and abet" human rights abuses through "accomplice liability."
TRUMP ADMINISTRATION PLANS NEW TARIFFS ON 60 TRADING PARTNERS OVER FORCED LABOR IMPORT ENFORCEMENT FAILURES
The Supreme Court dismissed the lawsuit accusing Cisco of aiding the persecution of Falun Gong in China. (Reuters/Evelyn Hockstein)
The Falun Gong movement was founded in China in 1992, and was banned by the Chinese Communist Party (CCP) in 1999, after thousands of the group's members appeared at the central leadership compound in Beijing to stage a silent protest. The group has called for its members to denounce the CCP and has been heavily critical of its leadership in China.
Justice Amy Coney Barrett authored the majority opinion which supported Cisco's argument that the law doesn't support holding companies liable for aiding and abetting human rights abuses.
"Courts cannot create new rights of action to remedy violations of international law, so there is necessarily no liability for aiding and abetting such violations," Barrett wrote as the ruling dismissed the claims against Cisco.
The Supreme Court's ruling split the justices along ideological lines, with the six conservative justices in the majority and the three liberals dissenting.
COMPUTER WARS HEAT UP AS CHINESE SUPERCOMPUTER TOPS ALL US MACHINES IN SPEED FOR FIRST TIME SINCE 2017
The Falun Gong movement is critical of the Chinese Communist Party and its members face persecution in China. (Yasin Ozturk/Anadolu Agency/Getty Images)
Paul Hoffman, a lawyer for the plaintiffs, said they were disappointed with the ruling and called for Congress to take action and create a law "so that victims of serious human rights violations at the hands of U.S. corporations may hold those corporations accountable in U.S. courts under the Alien Tort Statute."
Ticker Security Last Change Change % CSCO CISCO SYSTEMS INC. 119.83 -1.32 -1.09% Additionally, the Supreme Court issued an 8-1 decision that a similar law known as the Torture Victim Protection Act of 1991 didn't permit a group of plaintiffs to move forward with a lawsuit that sought to hold two Cisco executives liable for allegedly aiding and abetting torture.
GORDON CHANG: US SHOULD EXPAND SANCTIONS ON CHINA-LINKED NETWORKS TO HIT IRAN OIL REVENUE
Cisco called the allegations against them unfounded and offensive. (David Paul Morris/Bloomberg via Getty Images)
Plaintiffs accused Cisco of knowingly designing and implementing the "Golden Shield," which is an internet surveillance system used by the CCP to target dissidents, and they say China used the system to track and torture Falun Gong members.
FOX Business reached out to Cisco for comment. The company has called the allegations unfounded and offensive.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The decision by the 9th Circuit Court of Appeals that was reversed by the Supreme Court had held the plaintiffs demonstrated plausible claims that Cisco provided technical assistance to the CCP and permitted it to proceed to discovery in advance of a trial. The Supreme Court's decision dismissed the lawsuit.
Key Takeaways CSCO fiscal third-quarter revenues rise 12% year over year to $15.8B, with networking up 25% to $8.8B.Networking orders jump over 50%, while hyperscale infrastructure reaches $1.9B vs $600M YoY.Cisco aims approximately $4B AI infra revenues in FY26 and at least $6B in FY27 on strong hyperscaler demand. Cisco Systems (CSCO - Free Report) is benefiting from strong demand for its networking and infrastructure solutions, which continue to support growth across the business. In the third quarter of fiscal 2026, revenues rose 12% year over year to a record $15.8 billion, while product revenues increased 17%. Networking remained the key growth driver, with revenues climbing 25% year over year to $8.8 billion on healthy demand across enterprise, cloud and service provider markets.
The company’s networking portfolio continues to gain traction. Networking product orders surged more than 50% in the third quarter of fiscal 2026, marking the seventh consecutive quarter of double-digit growth. The increase was fueled by triple-digit growth in service provider routing and compute, and strong double-digit growth in data center switching, campus switching, wireless, enterprise routing and industrial IoT.
Cisco is also seeing robust demand from hyperscale customers. Orders tied to its high-performance infrastructure offerings reached $1.9 billion in the quarter, up significantly from $600 million a year earlier. Year-to-date orders totaled $5.3 billion, exceeding the company’s previous full-year target. Strong adoption of Silicon One systems and Acacia optical solutions continues to contribute meaningfully to this momentum.
Enterprise customers are increasingly upgrading its technology environments, creating additional growth opportunities. Its data center switching orders increased more than 40% year over year, while campus networking orders rose more than 25% to a record level. Wireless orders climbed more than 40%, supported by growing adoption of WiFi 7 products and continued network modernization efforts. Demand for Cisco’s next-generation switching, routing and wireless products remained robust during the quarter. Customer adoption continued to exceed that of earlier product cycles, while WiFi 7 orders posted strong double-digit sequential growth and accounted for approximately half of the company’s wireless orders.
Cisco’s management is confident about further upside. The company expects to recognize approximately $4 billion in AI infrastructure revenues from hyperscalers in fiscal 2026 and at least $6 billion in fiscal 2027. Its innovation pipeline, strong customer demand and strategic investments in silicon, optics, security and AI position Cisco to capitalize on the multiyear, multibillion-dollar opportunity presented by the AI networking boom.
CSCO Faces Tough Competition in the Networking DomainCisco is facing stiff competition from Arista Networks (ANET - Free Report) and HPE (HPE - Free Report) . Both Arista Networks and HPE are expanding their footprint in the networking domain.
Arista Networks is a leader in high-speed Ethernet switching, particularly 100G, and is benefiting from rising demand for 800G and faster networking. Growth is driven by large data center expansions supporting distributed computing and cloud infrastructure. Its software stack, including EOS, CloudVision and AVD, simplifies network management. Customers include cloud providers, enterprises and telecom companies expanding across industries like manufacturing, insurance and telecom.
HPE’s focuses on artificial intelligence, industrial IoT and distributed computing as the next major growth markets. The company sees these areas as key drivers of future infrastructure demand. The acquisition of Juniper Networks has strengthened HPE’s position in networking, expanding its capabilities across AI, cloud and hybrid environments. This has helped improve its competitive position in large-scale modern infrastructure deployments.
CSCO Share Price Performance, Valuation & EstimatesCisco shares have gained 56% in the year-to-date period, outperforming the broader Zacks Computer and Technology sector’s return of 20.2%.
CSCO Stock Outperforms Sector
Image Source: Zacks Investment Research
CSCO stock is trading at a premium, with a trailing 12-month price/book of 9.69X compared with the Zacks Computer Networking industry’s 9.36X. Cisco has a Value Score of F.
CSCO Stock Is Overvalued
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings is currently pegged at $1.17 per share, up 4 cents over the past 30 days, suggesting 18.18% growth from the figure reported in the year-ago quarter.
Cisco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Editor’s note: “The Agentic AI Tax: Who Pays and Who Profits” was previously published in May 2026 with the title, “Why the Smartest AI Investors Are Ignoring the Model Race.” It has since been updated to include the most relevant information available.
The dot-com era taught investors a valuable lesson.
Betting on the winning website was hard. Owning the infrastructure every website needed was easier.
Amazon (AMZN) survived. Pets.com disappeared. AOL rose, then faded. Dozens of internet companies burned through hundreds of millions of dollars and left investors with nothing. But Cisco (CSCO) made money through it all because every byte of internet traffic needed its routers and switches to move across the web.
The stock rose about 3,400% in five years.
Cisco didn’t have to pick the winning website because it sold the equipment that made the internet work.
The same dynamic is starting to play out in AI right now — but with one important twist.
The market already understands that AI needs infrastructure. What it still underestimates is how much more infrastructure AI consumes when it stops answering questions and starts completing work.
That is the next phase of the boom. And it creates what we call the Invisible AI Tax.
From Chatbots to Agents: Why the Infrastructure Bill Just Got 20x Bigger A chatbot answers a prompt. An agent pursues a goal.
Those two consume very different amounts of infrastructure.
A simple chatbot exchange might process a few hundred tokens — the chunks of text a model reads and generates to complete a response. You ask a question, the model answers, and the interaction ends.
But an agentic workflow is different.
Tell a chatbot, “Write me a marketing plan,” and it gives you a response. Tell an agent, “Grow our market share by 15% this quarter,” and it starts working. It researches competitors, pulls internal data, drafts campaigns, tests messages, coordinates with other agents, revises, reports, and keeps going until the task is done.
What begins as a few hundred tokens can become tens of thousands as the system plans, executes, checks its own work, calls tools, communicates with databases, and iterates. That is the part most investors still have not fully processed.
AI agents can consume 20 to 30 times more physical infrastructure per task than a simple chatbot exchange.
Not 20% more — 20 to 30 times more.
More compute, more memory, more networking, more cooling, more power, more data center capacity.
And this is not some distant scenario. More than half of major enterprises already have AI agents running in production, and adoption is projected to rise sharply over the next year.
That means the AI boom is moving from experimentation to persistent infrastructure consumption.
The question is where, exactly, all that additional demand lands.
The Six Tollbooths Every Agentic AI Workload Must Pay Think of the AI economy as a superhighway.
Every model query and agentic task has to travel across physical infrastructure. And along the way, it passes through six tollbooths: compute, memory, networking, thermal management, power, and real estate.
We’ve covered parts of this system before — the custom silicon shift, the data center networking bottleneck, and the physical limits around power and cooling. But this piece is about the next layer of the thesis: agents consume that infrastructure — and then some.
Compute is the most visible. Every AI model needs specialized chips to run — GPUs, custom accelerators, and inference chips built to handle enormous amounts of parallel processing. Nvidia still sits at the center of this layer, but custom silicon designers are increasingly important as hyperscalers build cheaper, optimized chips for their own AI workloads.
Memory is the next toll. Agents need context; to remember what they have done, what they are doing, and what comes next. The longer and more complex the task, the larger the context window — and the more high-performance memory the system needs to keep everything moving.
Networking may be the least appreciated tollbooth. Agents communicate with databases, tools, APIs, external services, and other agents. That traffic has to move between chips, racks, servers, and data centers at extraordinary speed. As agentic AI spreads, switches, interconnects, cables, optics, and networking silicon become even more important.
Then comes thermal management. Dense AI racks generate extreme heat. And because agentic workloads run longer and more persistently than simple chatbot requests, thermal production only rises. Liquid cooling, coolant distribution units, and precision thermal systems are now core infrastructure for keeping AI systems online.
Power is the fifth toll. AI agents do not sleep. They can run constantly, across thousands of enterprises, performing tasks in the background around the clock. That persistence requires grid upgrades, onsite power, long-term electricity contracts, and reliable baseload energy.
Finally, there is real estate. Every server, chip, cooling unit, power system, and networking rack has to live somewhere. That means specialized data center buildings with access to land, electricity, cooling, and fiber.
A chatbot taps all six. An agent pounds them.
That is the Invisible AI Tax. And the bigger the agent economy gets, the more every transaction pays it.
The Numbers Are Already Showing Up In Earnings The tollbooths are already collecting.
At Google Cloud Next, CEO Sundar Pichai disclosed that Google’s AI models are processing more than 16 billion tokens per minute. That number was up about 60% from the prior quarter. And hundreds of Google customers each consumed more than one trillion tokens over the past year.
One trillion tokens each.
Nvidia CEO Jensen Huang has said the amount of inference compute needed is already 100 times more than initially expected — and that this is just the beginning.
Hyperscaler AI infrastructure spending is exploding. AI-related memory demand is surging. Networking targets are moving higher. Cooling backlogs are expanding. Power companies are signing long-term agreements with cloud giants. Data center landlords are leasing capacity as fast as they can build it.
The tollbooth companies are not hoping this demand shows up. They are reporting it quarter after quarter.
And the agentic multiplier is only starting to hit.
What This Means for Agentic AI Stocks The AI model war will produce winners and losers.
OpenAI. Google. Anthropic. Meta. xAI. Chinese competitors. Open-source models. Proprietary models. Some will win. Some will fade.
Trying to pick the ultimate winner is hard, and even the smartest technology investors can get it wrong.
But whichever model wins, the infrastructure bill stays the same.
Every model needs compute; every agent needs memory; every workflow needs networking; every rack needs cooling; every data center needs power.
That is why the Invisible AI Tax matters so much.
The best-positioned infrastructure companies get paid as AI usage intensifies.
And agents are the multiplier.
The first phase of this boom was about proving AI worked. The next is about paying to run it at scale.
That is where the tollbooth companies sit.
The Real Risks (This Isn’t a Free Lunch) None of this makes these stocks risk-free.
Many already trade at premium valuations. A pause in hyperscaler capex would hit the group as a whole. Some companies have heavy customer concentration. And some emerging infrastructure plays — especially in next-generation power, cooling, and optical networking — still carry real execution risk.
But those are timing and sizing risks. They do not break the core thesis.
The shift from chatbots to agents increases infrastructure consumption per task. And a narrow set of companies collects revenue as that consumption rises.
The Infrastructure Always Gets Paid Most investors are watching the AI race and trying to pick the winner. That is the wrong game.
The winner of a race still has to run the road. And the AI road has a toll.
The companies collecting that toll get paid regardless of who crosses the finish line first.
Unless you’re early enough that the road itself hasn’t even been priced in yet.
The investors who made the most money from the dot-com era didn’t wait for Cisco to become obvious. The same opportunity exists right now — hiding in plain sight, underneath two IPOs that will dominate every financial headline the moment they arrive.
Launching at Cisco Live 2026, this solution helps enterprises safely deploy generative AI, strengthen zero trust, and simplify access management
LAS VEGAS & MUMBAI, India--(BUSINESS WIRE)--LTM, the Business Creativity partner to the world’s largest enterprises, launches its new Managed Secure Service Edge (SSE) solution at Cisco Live 2026. Built directly upon Cisco Secure Access- Cisco's dedicated SSE solution, this offering is designed for cloud-first and hybrid work environments. By combining the robust security of Cisco Secure Access with LTM’s AI-powered managed services, the solution secures access to applications and enables secure use of AI applications and models for the modern enterprise.
Cisco SSE brings networking and security together in a cloud-native, zero-trust framework, enabling identity- and context-aware access with consistent protection across users, devices, and locations. By unifying Zero Trust Network Access, Secure Web Gateway and Cloud Access Security Broker capabilities under centralized policy control, the solution simplifies security operations while delivering end‑to‑end visibility at enterprise scale.
In addition to Cisco SSE capabilities, LTM’s managed SSE offering combines deep cybersecurity domain expertise with AI-led managed services, ensuring seamless transformation and robust operations. Backed by 4,000+ security professionals and nine Cyber Defense Resiliency Centers, LTM delivers 24x7 AI‑driven threat detection and optimization.
“Modern enterprises need AI-powered security that adapts to how people work today, anywhere, on any device, at any time. Our partnership with Cisco delivers a unified, cloud-native SSE solution that simplifies protection, improves visibility, and empowers organizations to operate securely at scale,” said Chandan Pani, Chief Information Security Officer, LTM.
“By combining Cisco’s world-class innovation with LTM’s deep technical expertise, we are making enterprise-grade security more accessible for today’s organizations. LTM’s managed SSE solution balances business agility with a seamless user experience. Cisco’s security portfolio—including Secure Access—has been purpose-built to be consumed as a service, enabling organizations to adopt and scale modern security with greater simplicity and speed,” said Raj Chopra, Senior Vice President and Chief Product Officer, Cisco Security.
Cisco Live 2026 is Cisco’s premier global event, bringing together industry leaders and technology experts to explore the latest innovations in networking, security, and cloud through keynotes, technical sessions, and live demonstrations. [https://www.ltm.com/services/cyber-security/secure-service-edge]
About LTM
LTM is a global technology services and consulting company and the business creativity partner to the world’s largest and most disruptive companies. We bring human insights and intelligent systems together to help enterprises across industries rewire their business models, accelerate innovation, and drive AI-centric growth. With our integrated operations, transformation, and business AI services, we design and deliver solutions that create new productivity paradigms and new roads to value. Together with 87,000 employees across 40 countries and our global network of hyperscaler partners, LTM—a Larsen & Toubro company—owns business outcomes for over 700 clients, helping them to not simply outperform the market, but to Outcreate it.
Recognition highlights unmatched Cisco expertise and faster, lower-risk outcomes for customers
BOSTON--(BUSINESS WIRE)--NWN, the leading AI-powered technology solutions provider, today announced continued momentum in its strategic partnership with Cisco, including achieving Preferred Partner status across all six Cisco portfolios within Cisco’s new Cisco 360 Partner Program. The company will also showcase its joint innovation with Cisco at Cisco Live and take the stage alongside Cisco at InfoComm 2026, reinforcing its leadership in delivering secure, intelligent experiences for modern enterprises.
Cisco Preferred Partners demonstrate exceptional sales and technical expertise, along with a proven track record of delivering tailored Cisco solutions. With a commitment to excellence that covers the entire technology lifecycle, Cisco Preferred Partners leverage advanced capabilities and a personalized approach to understand a customer’s unique challenges, achieve measurable results, and deliver business innovation every step of the way. Most recently, NWN earned Cisco Preferred Collaboration Partner status, completing the milestone of holding the Preferred Partner designation across all six current Cisco portfolio areas. This achievement further positions NWN as a differentiated partner for customers seeking integrated, outcome-driven technology solutions.
“Partners like NWN are instrumental in driving the next generation of solutions for our customers,” said Rhonda Henley, Vice President, Americas Partners Sales, Cisco. “By achieving Preferred status across all six architectures, NWN has proven their expertise in delivering consistent, high-impact outcomes that fuel customer growth across the Americas.”
“This milestone reflects the depth of our partnership with Cisco and our continued investment in delivering exceptional customer outcomes,” said Jim Sullivan, President and CEO of NWN. “Achieving Preferred status across all Cisco architectures further differentiates NWN in the market and reinforces our ability to help clients modernize securely, innovate faster, and deliver meaningful digital experiences.”
Driving Innovation with Cisco Across AI, Connectivity and Security
NWN continues to expand its AI-powered platform portfolio with strong Cisco integration, enabling organizations to simplify operations, strengthen security, and deliver intelligent experiences across the modern enterprise:
Intelligent Connectivity Platform – NWN’s multi-OEM, AI-powered Network as a Service platform integrates Cisco technologies to deliver resilient, automated, and scalable network experiences for the modern enterprise. Advanced Cybersecurity Platform – Built with Cisco, NWN’s cybersecurity solution delivers comprehensive protection, visibility, and response capabilities across hybrid environments. Modern Collaboration Solutions – NWN continues to expand its AI-powered platform portfolio with deep Cisco integration and a growing portfolio of Cisco-powered managed services, enabling organizations to simplify operations, strengthen security, and deliver intelligent experiences across the modern enterprise. Engaging Customers at Cisco Live
At Cisco Live 2026, May 31 through June 4, NWN will showcase how its AI-powered platforms and deep Cisco integration deliver secure, agile, and experience-driven outcomes. Attendees can connect with NWN experts to explore AI-driven networking, secure collaboration, end-to-end Cisco security strategies, and managed services.
Michael Israel, CIO of the Kraft Group, will take the stage alongside Cisco, highlighting real-world innovation and customer success—including NWN’s role as a trusted and exclusive partner to the Kraft Group for Cisco solutions.
NWN hosted an exclusive customer and partner reception at Beer Park, offering a unique opportunity to engage with industry peers and NWN leadership. Connect with NWN while at Cisco Live to learn how to accelerate digital transformation with a Preferred Partner across every Cisco architecture.
On Stage at InfoComm 2026
NWN will also join Cisco on stage at InfoComm 2026 on Thursday, June 18 at 10:00 AM PT to showcase innovations in visual collaboration and intelligent workplace experiences.
In this fast-paced session, NWN and Cisco will explore how AI, intelligent devices, and analytics are transforming collaboration spaces into fully managed digital experiences—helping organizations boost engagement, increase productivity, simplify operations, and securely scale hybrid work. Attendees will also gain insight into key workplace trends and strategies for delivering seamless collaboration across environments.
About NWN
NWN is the leading AI-powered technology solutions provider for North America's most innovative public and private organizations. For more than 30 years, NWN has helped over 6,000 CIOs deliver technology modernization programs with its Intelligent Workplace, Customer Experience (CX), Managed Devices, Cybersecurity and Public Safety, Connectivity, and Intelligent Cloud solutions. The company's proprietary Experience Management Platform ensures seamless service delivery, real-time observability and improved efficiency for its clients' most demanding technology needs. NWN is a high-performance, high-integrity team of 1,000+ experts committed to a customer-obsessed culture, earning a 80+ Customer Net Promoter Score. The company has been recognized with hundreds of industry awards and is proud to be a 'Best Place to Work' with an 80+ Employee Net Promoter Score.
For much of the past year, Wall Street has debated whether the semiconductor rally is a once-in-a-generation earnings cycle or bubble. The Compound and Friends podcast turned that into a clean event-versus-precedent debate, with Josh Brown invoking Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) as the 2000 ghost in the room and Fidelity strategist Denise Chisholm pushing back with a line that has bounced around chip desks all week: "price might be understanding something you don’t quite get." But the data she brought does more work than the quote. Her pattern study lands on the opposite conclusion from what a casual look at the charts would suggest.
The SOX index, per the panel, is sitting 69% above its 200-day moving average, which the show called unprecedented over the last 25 years. Semiconductors as a group are up roughly 100% over the past year. NVIDIA (NASDAQ:NVDA) is up 62% over the past year and carries a $5.4 trillion market cap. Broadcom (NASDAQ:AVGO) is up 95% in twelve months. Micron Technology (NASDAQ:MU) has vaulted 986% over the same window, which Brown framed by noting the stock moved from the 127th largest S&P 500 name a year ago to number 11 today.
The 2000 Mirror The precedent Brown reached for is the one every veteran knows. Cisco was briefly the most valuable company on the planet in March 2000, traded at a triple-digit multiple, then surrendered most of its value over two years. Cisco today sits at a $504.5 billion market cap with a trailing P/E of 43 and a forward P/E of 26, and even after a 68% year-to-date run, it remains a reminder that infrastructure-buildout darlings can take decades to revisit a parabolic top. The fiber that fueled Cisco’s 1999 boom sat unlit in the ground for years. For a deeper look at how today’s AI leaders compare to that era, see our prior coverage of the AI infrastructure trade.
I’ve been watching this sector since the original GPU compute thesis took shape, and the Cisco parallel is the first thing any honest bull must address.
Chisholm’s Counter Chisholm’s pushback rests on base rates. She argued that semiconductors are up roughly 100%, exactly in line with their earnings growth, and that historically, when an industry runs 70% to 100%, about 65% of the time it outperforms the following year. Layering valuation onto the pattern, she put the odds of semis outperforming over the next twelve months at roughly 70%.
The structural distinction she drew from 2000 matters. Micron’s memory "is put into use immediately," she said, contrasting that with the dark fiber problem two decades ago. Data centers, in her words, are "literally saying we’re short compute based on today’s demand." Micron just posted Q1 FY26 revenue of $13.64 billion, up 56.6% year over year in its most recent 10-Q filing, with non-GAAP EPS of $4.78 and a Cloud Memory unit running at a 66% gross margin. NVIDIA’s most recent quarter delivered $81.61 billion in revenue, up 85.2% year over year, and Data Center Networking grew 199%. Broadcom’s AI semiconductor revenue jumped 106% year over year to $8.4 billion, and CEO Hock Tan has staked out a goal of $100 billion-plus in AI sales by 2027.
The Valuation Gut-Check NVIDIA trades at a trailing P/E of 34 and a forward P/E of 26, with a PEG of 0.69. Micron, even after its run, sits at a forward P/E of 11. Cisco in 2000 traded north of 150x earnings. This setup looks structurally different. UBS captured the bullish edge with its Micron price target of $1,625, raised from $535, more than double the $700.51 close cited on the show.
The speed remains a problem even inside the bull case. One portfolio manager on the podcast described watching Micron rise 5% daily, which historically precedes air pockets. Chisholm conceded semis are still cyclical, only suggesting the cycle may be stretching from roughly three years to seven. Cycles mean-revert harder when margins are at all-time highs, which is exactly where NVIDIA’s 75% non-GAAP gross margin and Broadcom’s 68% adjusted EBITDA margin sit now.
What the Pattern Says The Long Memory verdict is clean. The 2000 precedent screams caution at the price. The base-rate study Chisholm cited says price has historically been a leading indicator of fundamentals catching up. Both can be partly right. Cisco was a real company that earned its way back. The internet still ate the world. Long term, the buildout of AI infrastructure looks more like rails and grids than unused fiber, and Wall Street has a way of paying off patient owners of pick-and-shovel cycles even when entry was uncomfortable.
What I’m watching now: whether order books stretching into 2027 hold up when hyperscaler capex guidance refreshes, and whether NVIDIA’s $119 billion in total supply commitments turns into delivered revenue or sticky inventory. The pattern favors the bulls. The speed of Micron’s chart says not to confuse a favorable base rate with a free lunch.
The artificial intelligence boom that’s pushing market caps to records is reshaping employment. Challenger, Gray & Christmas data highlighted on CNBC’s Closing Bell Overtime on June 4 indicates that more than 87,000 layoffs this year have been tied to AI, already eclipsing all of 2025’s full-year total just five months in. Chip leader NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) keeps minting AI fortunes, but the same trend is hollowing out white-collar tech roles.
This morning’s May jobs report seemed to push back on the gloom. Nonfarm payrolls rose 172,000, well above the 80,000 to 100,000 economists had penciled in, and the unemployment rate held at 4.3%. Hiring tied to the NVIDIA-led AI buildout helped lift total nonfarm payrolls to 159,001 thousand, a fresh record.
Beneath that headline, the composition of the cuts tells a sharper story. Tech accounted for nearly 40% of all job cuts in May, the highest monthly tech share since last August. Bellwethers including IBM (NYSE:IBM) and Qualcomm (NASDAQ:QCOM) face pressure on slowing cloud and chip guidance, with the Dow recently shedding more than 400 points on losses in IBM and Cisco Systems (NASDAQ:CSCO) shares.
Inside the Challenger Numbers May’s announced layoffs jumped 16% versus April, the third straight monthly increase. Qualcomm shares moved down 10% on June 5 amid AI PC competition and flat earnings outlook, showing how the layoff narrative and the tape feed each other.
Weekly unemployment claims have ticked higher even as business-services openings stay firm. Initial claims reached 225,000 for the week ending May 30, up 35,000 over the prior month. IBM and other legacy software vendors trimming headcount fit the same softening picture.
“Anybody Who’s Coding for a Living Is Feeling It” A guest on the segment summed up the labor stakes, stating that “anybody who’s coding for a living is feeling it for sure.” Engineers at NVIDIA partners and legacy code shops alike are watching coding copilots compress how many bodies a project needs.
The same guest urged caution on the raw count, noting, “It’s announced layoffs, right? Sometimes it just means general position eliminations, headcount reductions,” and that “Companies are pretty headcount aware at this point and they want to keep things pretty tight going into this summer.” Some firms tracking Qualcomm-style chip cycles may tag cuts as AI-driven for narrative purposes, so the figure is best treated as directional.
Even healthy operators are restructuring. Starbucks (NASDAQ:SBUX) is tying part of tech-team bonuses to AI usage and anticipates roughly $400 million in restructuring charges associated with the company’s “Back to Starbucks” push, a sign that AI-linked workforce optimization is spreading beyond pure-play tech.
A Two-Speed Labor Market The host raised the economic stakes, noting these technology jobs are “higher-paid jobs, presumably. And the impact on the economy could actually be pretty significant.” Average hourly earnings ran at $37.53 in May, but tech salaries at IBM, NVIDIA, and similar firms sit well above that average. Each displaced engineer hits consumer spending harder than the headline number suggests.
Consumer sentiment already reflects that anxiety. The University of Michigan index sat at 49.8 in April, down from 61.7 last July and squarely in recessionary territory. Apple (NASDAQ:AAPL) is preparing to unveil its biggest AI push yet at the Worldwide Developers Conference (WWDC) on June 9, with Wedbush’s Dan Ives anticipating significant Siri-related announcements.
What Investors Can Watch From Here The Challenger figure should be read as directional rather than precise. Announced cuts don’t always fully materialize, and AI attribution can be marketing as much as measurement, so investors tracking Apple, NVIDIA, and the broader hyperscaler complex shouldn’t extrapolate a recession from one report.
That said, the trend warrants consideration. Three straight monthly increases in announced layoffs, rising jobless claims, and a 40% tech share of cuts together suggest that the pain is concentrated in high-paid coding roles even while the overall payroll number from IBM-style enterprises holds up. Investors may want to right-size their exposure to companies leaning hardest on AI-driven cost cuts.
The takeaway is a bifurcated economy: the broad labor market looks resilient, but the engine rooms of Silicon Valley are running leaner. Watch for whether June’s Challenger report and the next initial-claims releases from companies like Qualcomm confirm or counteract the softening.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cisco Systems (CSCO - Free Report) .
Cisco currently has an average brokerage recommendation (ABR) of 1.79, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 26 brokerage firms. An ABR of 1.79 approximates between Strong Buy and Buy.
Of the 26 recommendations that derive the current ABR, 15 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 57.7% and 3.9% of all recommendations.
Brokerage Recommendation Trends for CSCO
Check price target & stock forecast for Cisco here>>>
The ABR suggests buying Cisco, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Should You Invest in CSCO?In terms of earnings estimate revisions for Cisco, the Zacks Consensus Estimate for the current year has increased 3.6% over the past month to $4.28.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Cisco. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Cisco may serve as a useful guide for investors.
After Friday's tech wreck sent the Nasdaq Composite (^IXIC +0.31%) index tumbling 4% and vaporizing over $1 trillion from semiconductor stocks, Monday's market looks a lot friendlier. Chip stocks are back in the driver's seat, and investors are largely pretending last week's panic never happened.
The Nasdaq Composite has gained 1.5% as of 12:46 p.m. ET, clawing back some of Friday's painful losses. The S&P 500 (^GSPC +0.50%) is up 0.8%, while the Dow Jones Industrial Average (^DJI +0.70%) is barely in the green at 0.2%.
Trillion-dollar tech giants are doing the heavy lifting here. The equal-weighted Invesco S&P 500 Equal Weight ETF (RSP +0.91%) is only up 0.2%, far behind the cap-weighted versions of the same stock list. In other words, megacap stocks are having a party on an otherwise quiet market day.
^IXIC data by YCharts
Why chip stocks are leading this market rally Chipmakers Intel (INTC +6.49%) and Micron Technology (MU 1.02%) are the standout performers today.
Intel's stock is up 11.8% on reports that Alphabet (GOOG +0.44%) (GOOGL +0.53%), Nvidia (NVDA +0.15%), and Tesla (TSLA +1.65%) are at least considering Intel's manufacturing services for their future AI accelerator chips. In the case of Alphabet, the Google parent reportedly placed a firm order for 3 million AI chips. Tesla is more interested in using Intel's chip-building technology in its own fabs, but license royalties can also be lucrative.
Nvidia is the main driver of Micron's big jump. CEO Jensen Huang is securing long-term memory chip contracts with Micron rival SK Hynix, and semiconductor investors are taking this move as a good sign for memory makers in general. Nvidia is known to include the Big Three memory makers in its AI accelerator designs. A tighter partnership with SK Hynix might tilt the balance of order volumes away from Micron and Samsung, but it could also be part of a broader strategy to lock down multiple large-scale supply channels.
Image source: Getty Images.
I don't have much to say about the Dow today. Among its 30 components, only Cisco Systems (CSCO 0.65%) moved more than 2% as of this writing, adding just 22 points with a 3% gain. Goldman Sachs (GS +2.61%) made a bigger difference of 82 Dow points, though its 1.3% price gain was just normal market noise.
Meanwhile, geopolitics stirred volatility again. Iran and Israel exchanged missile strikes over the weekend, sending oil prices spiking before both sides agreed to cool things down. Brent crude touched nearly $98 a barrel before retreating, and the United States Oil Fund (USO 2.64%) is up 1.6% on Monday.
Today's Change
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Keeping it all in perspective Last week's sell-off followed a hot jobs report that revived fears of Fed rate hikes, ending the S&P 500's nine-week winning streak. Today's bounce is concentrated in the same mega-cap tech names that led on the way down.
The week ahead brings more potential plot twists: Wednesday delivers both the Consumer Price Index report and Oracle (ORCL 0.05%) earnings, while Friday brings SpaceX to the market in what's expected to be the largest IPO ever.
One day's rally doesn't erase one day's panic, and neither tells you much about where stocks will be in five years. The AI story hasn't changed since Friday; only the mood has. Long-term investors can safely tune out the drama and check back after Wednesday's inflation report.
Anders Bylund has positions in Alphabet, Intel, Invesco S&P 500 Equal Weight ETF, Micron Technology, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Cisco Systems, Goldman Sachs Group, Intel, Micron Technology, Nvidia, Oracle, and Tesla. The Motley Fool has a disclosure policy.
