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Should You Buy, Sell, or Hold Cisco Stock After a 68% Rise in a Year?
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Key Takeaways
Cisco stock surged 68% in a year, beating the tech sector's 27.9% gain amid strong AI demand.
CSCO's fiscal 2026 AI orders hit $9.3 billion, while fiscal fourth-quarter networking revenues surged 28%.
Cisco expects $7.5 billion in hyperscaler AI revenues in fiscal 2027, supported by strong AI demand.
Cisco Systems (CSCO - Free Report) shares have surged 68% over the past year, outperforming the broader Zacks Computer & Technology sector, which rose 27.9%.
The company’s shares have also outperformed peers, including Arista Networks (ANET - Free Report) and Broadcom (AVGO - Free Report) . Both Arista Networks and Broadcom are expanding their footprints in the data center infrastructure and artificial intelligence (AI) networking space. Shares of Arista Networks and Broadcom have rallied 52% and 3.1%, respectively, over the past year.
The outperformance can be attributed to the accelerating AI infrastructure investments, strong hyperscaler demand and a multiyear networking upgrade cycle. The growing adoption of Silicon One platforms, optical networking solutions and campus networking products, alongside strengthening demand for cybersecurity, Splunk and observability solutions, is driving growth.
CSCO Stock Performance
Image Source: Zacks Investment Research
CSCO Benefits From AI Push & Strong Networking Growth
Cisco is benefiting from accelerating AI infrastructure investments, strong networking demand and an expanding portfolio of security and observability solutions. The growing adoption of agentic AI is driving demand for high-bandwidth, low-latency networking infrastructure across hyperscale data centers, enterprises and cloud environments, strengthening Cisco’s growth prospects.
Cisco’s AI infrastructure business continues to gain momentum. In the fourth quarter of fiscal 2026, the company secured $4 billion in hyperscaler AI infrastructure orders, bringing fiscal 2026 orders to $9.3 billion, approximately 4.5 times the previous year’s level. The company’s Silicon One architecture, particularly its P200 and G200-powered systems and Acacia optical solutions, is strengthening its competitive position. Cisco expects hyperscaler AI infrastructure revenues to reach $7.5 billion in fiscal 2027 compared with approximately $4 billion in fiscal 2026.
Strong networking demand has been noteworthy. In the fourth quarter of fiscal 2026, networking revenues surged 28% year over year, supported by triple-digit growth in AI infrastructure and double-digit growth in data center switching. Networking product orders increased 40%, marking the eighth consecutive quarter of double-digit growth. Data center networking orders grew more than 35%, while campus networking orders increased 20%, reflecting strong demand for infrastructure upgrades.
CSCO Benefits From Expanding Security Portfolio
Cisco Systems is benefiting from its expanding security portfolio, growing adoption of AI-driven cybersecurity solutions and strengthening Splunk momentum. In the fourth quarter of fiscal 2026, Security revenues increased 14% year over year to $2.23 billion. The entire security portfolio, including Splunk, recorded double-digit order growth.
More than 1,500 customers purchased Secure Access, XDR, Hypershield and AI Defense, bringing total net new customers to more than 6,400 since launch. Firewall orders increased more than 30%. The company expects security and observability growth to improve to high single digits in fiscal 2027.
Further expanding its portfolio, in August 2026, Cisco expanded its Secure AI Factory with NVIDIA (NVDA - Free Report) through a partnership with Supermicro, strengthening its AI infrastructure portfolio with rack-scale computing solutions.
The expanded offering integrates Supermicro’s liquid- and air-cooled servers with Cisco’s AI networking systems, enabling enterprises, neoclouds and sovereign clouds to efficiently manage large-scale AI workloads. Supporting NVIDIA Vera Rubin NVL72 and HGX Rubin NVL8 platforms, the architecture facilitates trillion-parameter model training and high-throughput inference. Cisco’s NVIDIA Cloud Partner-compliant architecture aims to simplify AI deployment, enhance security, and accelerate infrastructure scalability.
CSCO Initiates Positive Q1 2027 Guidance
Cisco’s outlook for the fiscal first quarter of 2027 remains strong, driven by strong AI demand, accelerating networking investments and improving security momentum.
For the first quarter of fiscal 2027, Cisco expects revenues between $18 billion and $18.2 billion. Non-GAAP earnings are projected to be in the range of $1.32-$1.34 per share.
The Zacks Consensus Estimate for Cisco’s first-quarter fiscal 2027 revenues is pegged at $18.09 billion, suggesting growth of 21.54% year over year.
The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings is pegged at $1.33 per share, up by a penny over the past 30 days and indicating 33% growth over the year-ago quarter’s reported figure.
Cisco’s 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 6.24X, higher than the Computer & Technology sector’s 6.1X.
CSCO Valuation
Image Source: Zacks Investment Research
Conclusion
Cisco’s strong AI infrastructure momentum, robust networking demand and expanding security portfolio are expected to drive long-term growth. Rising hyperscaler investments, growing adoption of Silicon One and improving Splunk momentum further strengthen its growth prospects. These factors justify its premium valuation.
View the Zacks #1 Rank List
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Should You Buy, Sell, or Hold Cisco Stock After a 68% Rise in a Year?
Key Takeaways
Cisco Systems (CSCO - Free Report) shares have surged 68% over the past year, outperforming the broader Zacks Computer & Technology sector, which rose 27.9%.
The company’s shares have also outperformed peers, including Arista Networks (ANET - Free Report) and Broadcom (AVGO - Free Report) . Both Arista Networks and Broadcom are expanding their footprints in the data center infrastructure and artificial intelligence (AI) networking space. Shares of Arista Networks and Broadcom have rallied 52% and 3.1%, respectively, over the past year.
The outperformance can be attributed to the accelerating AI infrastructure investments, strong hyperscaler demand and a multiyear networking upgrade cycle. The growing adoption of Silicon One platforms, optical networking solutions and campus networking products, alongside strengthening demand for cybersecurity, Splunk and observability solutions, is driving growth.
CSCO Stock Performance
Image Source: Zacks Investment Research
CSCO Benefits From AI Push & Strong Networking Growth
Cisco is benefiting from accelerating AI infrastructure investments, strong networking demand and an expanding portfolio of security and observability solutions. The growing adoption of agentic AI is driving demand for high-bandwidth, low-latency networking infrastructure across hyperscale data centers, enterprises and cloud environments, strengthening Cisco’s growth prospects.
Cisco’s AI infrastructure business continues to gain momentum. In the fourth quarter of fiscal 2026, the company secured $4 billion in hyperscaler AI infrastructure orders, bringing fiscal 2026 orders to $9.3 billion, approximately 4.5 times the previous year’s level. The company’s Silicon One architecture, particularly its P200 and G200-powered systems and Acacia optical solutions, is strengthening its competitive position. Cisco expects hyperscaler AI infrastructure revenues to reach $7.5 billion in fiscal 2027 compared with approximately $4 billion in fiscal 2026.
Strong networking demand has been noteworthy. In the fourth quarter of fiscal 2026, networking revenues surged 28% year over year, supported by triple-digit growth in AI infrastructure and double-digit growth in data center switching. Networking product orders increased 40%, marking the eighth consecutive quarter of double-digit growth. Data center networking orders grew more than 35%, while campus networking orders increased 20%, reflecting strong demand for infrastructure upgrades.
CSCO Benefits From Expanding Security Portfolio
Cisco Systems is benefiting from its expanding security portfolio, growing adoption of AI-driven cybersecurity solutions and strengthening Splunk momentum. In the fourth quarter of fiscal 2026, Security revenues increased 14% year over year to $2.23 billion. The entire security portfolio, including Splunk, recorded double-digit order growth.
More than 1,500 customers purchased Secure Access, XDR, Hypershield and AI Defense, bringing total net new customers to more than 6,400 since launch. Firewall orders increased more than 30%. The company expects security and observability growth to improve to high single digits in fiscal 2027.
Further expanding its portfolio, in August 2026, Cisco expanded its Secure AI Factory with NVIDIA (NVDA - Free Report) through a partnership with Supermicro, strengthening its AI infrastructure portfolio with rack-scale computing solutions.
The expanded offering integrates Supermicro’s liquid- and air-cooled servers with Cisco’s AI networking systems, enabling enterprises, neoclouds and sovereign clouds to efficiently manage large-scale AI workloads. Supporting NVIDIA Vera Rubin NVL72 and HGX Rubin NVL8 platforms, the architecture facilitates trillion-parameter model training and high-throughput inference. Cisco’s NVIDIA Cloud Partner-compliant architecture aims to simplify AI deployment, enhance security, and accelerate infrastructure scalability.
CSCO Initiates Positive Q1 2027 Guidance
Cisco’s outlook for the fiscal first quarter of 2027 remains strong, driven by strong AI demand, accelerating networking investments and improving security momentum.
For the first quarter of fiscal 2027, Cisco expects revenues between $18 billion and $18.2 billion. Non-GAAP earnings are projected to be in the range of $1.32-$1.34 per share.
The Zacks Consensus Estimate for Cisco’s first-quarter fiscal 2027 revenues is pegged at $18.09 billion, suggesting growth of 21.54% year over year.
The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings is pegged at $1.33 per share, up by a penny over the past 30 days and indicating 33% growth over the year-ago quarter’s reported figure.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote
CSCO Shares Are Trading at a Premium
Cisco’s 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 6.24X, higher than the Computer & Technology sector’s 6.1X.
CSCO Valuation
Image Source: Zacks Investment Research
Conclusion
Cisco’s strong AI infrastructure momentum, robust networking demand and expanding security portfolio are expected to drive long-term growth. Rising hyperscaler investments, growing adoption of Silicon One and improving Splunk momentum further strengthen its growth prospects. These factors justify its premium valuation.
CSCO currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.