Cisco Systems (NASDAQ:CSCO) Shares Up 1.1% - Still a Buy?

Key Points

• AI infrastructure expansion: Cisco is adding Supermicro rack-scale AI servers to its NVIDIA-backed Secure AI Factory, combining networking, computing and security to target growing enterprise, hyperscaler and sovereign-cloud demand.
• Strong financial performance: Cisco beat quarterly earnings and revenue expectations, with EPS of $1.22 and revenue of $17.25 billion, up 17.6% year over year. The company also issued fiscal 2027 EPS guidance of $5.05–$5.11.
• Positive outlook tempered by valuation and competition: Analysts’ consensus rating is “Moderate Buy” with an average price target of $129.43 versus the recent $112.36 share price, but Cisco’s P/E ratio of 33.64 and competition from specialized AI vendors and open-source networking remain risks.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) was up 1.1% on Wednesday . The stock traded as high as $112.95 and last traded at $112.36. Approximately 10,200,888 shares were traded during trading, a decline of 56% from the average daily volume of 23,421,094 shares. The stock had previously closed at $111.11.

Key Stories Impacting Cisco Systems

Here are the key news stories impacting Cisco Systems this week:

• Positive Sentiment: Expanded NVIDIA and Supermicro AI partnership: Cisco is adding Supermicro’s rack-scale AI servers to its NVIDIA-backed Secure AI Factory. The full-stack offering combines Cisco networking, NVIDIA computing and Supermicro systems, giving enterprises, neocloud providers and sovereign-cloud customers a more integrated way to deploy secure AI workloads. This could increase Cisco’s share of rising hyperscaler and enterprise AI infrastructure spending. Cisco Expands Secure AI Factory with NVIDIA for the Rack-Scale Era
• Positive Sentiment: Security positioned as an AI growth driver: Cisco is embedding cybersecurity into AI infrastructure as customers face increasing threats and demand greater control over sensitive data. The strategy may support Cisco’s fiscal 2027 AI infrastructure revenue outlook and help differentiate its offerings from networking and security rivals such as Palo Alto Networks and Fortinet. Cisco Expands Secure AI Factory: Can it Outpace PANW and FTNT?
• Positive Sentiment: Additional infrastructure opportunities: Cisco launched sovereign critical-infrastructure offerings in Canada, potentially expanding demand from governments and organizations seeking local control, security and flexibility. Analysts and financial commentary also remain broadly constructive, citing strong AI orders and upbeat guidance. Cisco Launches Sovereign Critical Infrastructure in Canada
• Neutral Sentiment: Strong results but demanding valuation: Cisco’s latest quarter exceeded earnings and revenue expectations, with revenue up 17.6% year over year, supporting the bullish AI narrative. However, the stock trades at a relatively elevated earnings multiple, and its recent performance has lagged its 50-day moving average despite remaining well above its 200-day average. Cisco Beat Estimates but Shares Fell
• Negative Sentiment: Competitive and execution risks: Cisco is entering more compute-heavy markets where NVIDIA, Supermicro and specialized AI-infrastructure vendors are strong. Separately, Spicer Group’s decision to replace its Cisco networking stack with open-source VyOS highlights the risk of customers seeking greater flexibility and avoiding proprietary infrastructure. VyOS Powers Spicer Group’s Cisco-to-Open-Source Network Transformation

Wall Street Analyst Weigh In

Several research analysts have commented on the stock. Zacks Research cut shares of Cisco Systems from a "strong-buy" rating to a "hold" rating in a report on Tuesday, August 4th. Freedom Capital upgraded shares of Cisco Systems from a "hold" rating to a "strong-buy" rating in a report on Sunday, August 16th. Rosenblatt Securities boosted their target price on shares of Cisco Systems from $150.00 to $165.00 and gave the stock a "buy" rating in a research note on Thursday, August 13th. Bank of America raised their price target on Cisco Systems from $135.00 to $150.00 and gave the company a "buy" rating in a research note on Monday, June 8th. Finally, Barclays lifted their price target on Cisco Systems from $121.00 to $123.00 and gave the stock an "equal weight" rating in a report on Thursday, August 13th. Two investment analysts have rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and seven have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $129.43.

Cisco Systems Stock Up 1.1%

The firm's 50-day moving average price is $115.65 and its two-hundred day moving average price is $100.78. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.79 and a current ratio of 0.93. The firm has a market cap of $442.86 billion, a PE ratio of 33.64, a P/E/G ratio of 2.16 and a beta of 1.02.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last posted its earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 EPS for the quarter, beating analysts' consensus estimates of $1.17 by $0.05. Cisco Systems had a net margin of 20.95% and a return on equity of 30.16%. The firm had revenue of $17.25 billion for the quarter, compared to the consensus estimate of $16.84 billion. During the same period last year, the firm posted $0.99 EPS. The company's revenue was up 17.6% on a year-over-year basis. Cisco Systems has set its FY 2027 guidance at 5.050-5.110 EPS and its Q1 2027 guidance at 1.320-1.340 EPS. As a group, equities research analysts expect that Cisco Systems, Inc. will post 4.44 EPS for the current fiscal year.

Cisco Systems Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, October 21st. Stockholders of record on Friday, October 2nd will be issued a $0.42 dividend. This represents a $1.68 annualized dividend and a dividend yield of 1.5%. The ex-dividend date of this dividend is Friday, October 2nd. Cisco Systems's payout ratio is presently 50.30%.

Insider Activity

In other news, EVP Oliver Tuszik sold 2,760 shares of the firm's stock in a transaction that occurred on Friday, August 14th. The shares were sold at an average price of $112.46, for a total transaction of $310,389.60. Following the transaction, the executive vice president directly owned 165,276 shares in the company, valued at approximately $18,586,938.96. This trade represents a 1.64% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thimaya K. Subaiya sold 7,127 shares of the company's stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $119.91, for a total transaction of $854,598.57. Following the completion of the sale, the executive vice president owned 140,857 shares of the company's stock, valued at approximately $16,890,162.87. This trade represents a 4.82% decrease in their position. 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. Insiders have sold a total of 53,611 shares of company stock worth $6,066,680 over the last ninety days. 0.01% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Cisco Systems

A number of institutional investors and hedge funds have recently made changes to their positions in CSCO. MidAtlantic Capital Management Inc. purchased a new position in shares of Cisco Systems in the 4th quarter valued at approximately $25,000. Intesa Sanpaolo Wealth Management acquired a new stake in shares of Cisco Systems during the fourth quarter worth $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. Financial Life Planners purchased a new position in Cisco Systems in the 1st quarter valued at $27,000. Finally, Manning & Napier Advisors LLC increased its stake in Cisco Systems by 137.0% in the 1st 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. 73.33% of the stock is owned by hedge funds and other institutional investors.

About Cisco Systems

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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