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Buy 2 Cybersecurity Bigwigs for Solid Price Upside for Rest of 2026
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Key Takeaways
Cisco's security revenue rose 14%, with firewall orders growing over 30% for a second consecutive quarter.
Cisco expects security growth to accelerate in fiscal 2027, with price targets indicating up to 68.1% upside.
Cloudflare's AI-driven security offerings are gaining traction, with price targets showing up to 40.6% upside.
The cybersecurity space has been witnessing a significant rally this year, sidelining the fear that the massive adoption of artificial intelligence (AI) technologies will cannibalize traditional software developers. This space focuses on companies that offer integrated protection against evolving security threats to safeguard applications, networks and cloud computing environments.
The chart below shows the price performance of our two picks year to date.
Image Source: Zacks Investment Research
Cisco Systems Inc.
Cisco has been benefiting from strong product orders from AI hyperscalers, enterprises, service providers, the public sector and cloud customers. In the fourth quarter of fiscal 2026, security revenues increased 14% year over year.
More than 1,500 customers bought newer security products, while firewall orders grew more than 30% for the second consecutive quarter. CSCO expects security growth to move from low single digits in fiscal 2026 to high single digits in fiscal 2027 and reach double-digit growth as the year progresses.
Cisco is extending AI into operations. Nearly 4,500 enterprises had signed up for Cisco Cloud Control by the end of the fourth quarter of fiscal 2026, while Cisco IQ had more than 8,600 customers.
Management said AI use across customer experience is raising renewal rates. In September 2026, CSCO said services should turn positive in fiscal 2027 and reach mid-single-digit growth by the year-end as hardware-related services attach.
Strong Estimate Revisions
For fiscal 2027 (ending July 2027), the Zacks Consensus Estimate currently shows revenues of $73.03 billion, suggesting an improvement of 20.2% year over year and earnings per share of $5.13, indicating an increase of 18.5% year over year. The Zacks Consensus Estimate for the current year has improved 8% in the last 60 days.
For fiscal 2028, the Zacks Consensus Estimate currently shows revenues of $77.87 billion, suggesting an improvement of 6.6% year over year and earnings per share of $5.59, indicating an increase of 9% year over year. The Zacks Consensus Estimate for the next year has improved 5.9% in the last 60 days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 36% from the last closing price of $98.15. The brokerage target price is currently in the range of $100-$165. This indicates a maximum upside of 68.1% and no downside.
Cloudflare Inc.
Cloudflare is benefiting from the demand for integrated security, networking and developer services as enterprises modernize and AI reshapes internet traffic. NET’s AI-focused networking and cybersecurity offerings are gaining traction as more workloads shift toward edge architectures.
Cybersecurity demand continues to support NET’s enterprise penetration as customers consolidate application security, networking and Zero Trust on a unified platform. NET signed a five-year $10.3 million agreement with a U.S. federal department for SASE, alongside a 13-month $15.5 million Magic Transit agreement with a Fortune 100 cloud infrastructure provider.
NET continues to develop its Workers platform and AI infrastructure offerings, including Workers AI, AI Gateway, Durable Objects and agent-building tools. Management is positioning the platform to support agent-driven workloads while providing security and connectivity services through its global network.
Strong Estimate Revisions
For 2026, the Zacks Consensus Estimate currently shows revenues of $2.92 billion, suggesting an improvement of 34.5% year over year and earnings per share of $1.27, indicating an increase of 36.6% year over year. The Zacks Consensus Estimate for the current year has improved 0.8% in the last seven days.
For 2027, the Zacks Consensus Estimate currently shows revenues of $3.78 billion, suggesting an improvement of 29.8% year over year and earnings per share of $1.73, indicating an increase of 36.4% year over year. The Zacks Consensus Estimate for the next year has improved 0.6% in the last seven days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 14.4% from the last closing price of $305.80. The brokerage target price is currently in the range of $190-$430. This indicates a maximum upside of 40.6% and a downside of 37.9%.
View the Zacks #1 Rank List
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Buy 2 Cybersecurity Bigwigs for Solid Price Upside for Rest of 2026
Key Takeaways
The cybersecurity space has been witnessing a significant rally this year, sidelining the fear that the massive adoption of artificial intelligence (AI) technologies will cannibalize traditional software developers. This space focuses on companies that offer integrated protection against evolving security threats to safeguard applications, networks and cloud computing environments.
Here, we recommend two cybersecurity bigwigs with a favorable Zacks Rank for investment in the remaining trading days of 2026. The companies are: Cisco Systems Inc. (CSCO - Free Report) and Cloudflare Inc. (NET - Free Report) . Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our two picks year to date.
Image Source: Zacks Investment Research
Cisco Systems Inc.
Cisco has been benefiting from strong product orders from AI hyperscalers, enterprises, service providers, the public sector and cloud customers. In the fourth quarter of fiscal 2026, security revenues increased 14% year over year.
More than 1,500 customers bought newer security products, while firewall orders grew more than 30% for the second consecutive quarter. CSCO expects security growth to move from low single digits in fiscal 2026 to high single digits in fiscal 2027 and reach double-digit growth as the year progresses.
Cisco is extending AI into operations. Nearly 4,500 enterprises had signed up for Cisco Cloud Control by the end of the fourth quarter of fiscal 2026, while Cisco IQ had more than 8,600 customers.
Management said AI use across customer experience is raising renewal rates. In September 2026, CSCO said services should turn positive in fiscal 2027 and reach mid-single-digit growth by the year-end as hardware-related services attach.
Strong Estimate Revisions
For fiscal 2027 (ending July 2027), the Zacks Consensus Estimate currently shows revenues of $73.03 billion, suggesting an improvement of 20.2% year over year and earnings per share of $5.13, indicating an increase of 18.5% year over year. The Zacks Consensus Estimate for the current year has improved 8% in the last 60 days.
For fiscal 2028, the Zacks Consensus Estimate currently shows revenues of $77.87 billion, suggesting an improvement of 6.6% year over year and earnings per share of $5.59, indicating an increase of 9% year over year. The Zacks Consensus Estimate for the next year has improved 5.9% in the last 60 days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 36% from the last closing price of $98.15. The brokerage target price is currently in the range of $100-$165. This indicates a maximum upside of 68.1% and no downside.
Cloudflare Inc.
Cloudflare is benefiting from the demand for integrated security, networking and developer services as enterprises modernize and AI reshapes internet traffic. NET’s AI-focused networking and cybersecurity offerings are gaining traction as more workloads shift toward edge architectures.
Cybersecurity demand continues to support NET’s enterprise penetration as customers consolidate application security, networking and Zero Trust on a unified platform. NET signed a five-year $10.3 million agreement with a U.S. federal department for SASE, alongside a 13-month $15.5 million Magic Transit agreement with a Fortune 100 cloud infrastructure provider.
NET continues to develop its Workers platform and AI infrastructure offerings, including Workers AI, AI Gateway, Durable Objects and agent-building tools. Management is positioning the platform to support agent-driven workloads while providing security and connectivity services through its global network.
Strong Estimate Revisions
For 2026, the Zacks Consensus Estimate currently shows revenues of $2.92 billion, suggesting an improvement of 34.5% year over year and earnings per share of $1.27, indicating an increase of 36.6% year over year. The Zacks Consensus Estimate for the current year has improved 0.8% in the last seven days.
For 2027, the Zacks Consensus Estimate currently shows revenues of $3.78 billion, suggesting an improvement of 29.8% year over year and earnings per share of $1.73, indicating an increase of 36.4% year over year. The Zacks Consensus Estimate for the next year has improved 0.6% in the last seven days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 14.4% from the last closing price of $305.80. The brokerage target price is currently in the range of $190-$430. This indicates a maximum upside of 40.6% and a downside of 37.9%.