Cisco Systems Inc. (CSCO) has had a strong performance in 2026. Its year-to-date gain of 47% is roughly triple the year-to-date gain of the S&P 500. What may be a head-scratcher to investors is why the stock slid so hard after earnings beat estimates and guidance looked strong on the surface. Cisco’s stock fell a sharp 8.4% to $113.19 despite what appeared to be good news. So, what are existing and prospective investors supposed to think of Cisco now?
Cisco’s fresh earnings report showed 15% revenue growth being drive by AI infrastructure orders. Even with guidance being put at $5.05 to $5.11 EPS for this fiscal year, concerns over margin compression led to the stock’s big sell-off. This is despite Cisco maintaining that demand remains strong, being offset as it has to spend more in capital spending and having to remain competitive in prices. Cisco emphasized that AI is a catalyst for a networking supercycle, with 35% growth in total product orders and that it sees continued strong demand. Unfortunately for investors, skepticism over margin pressures is keeping the stock at bay.
While the stock fell hard on Thursday, no analyst price target cuts were noted from research summaries. In fact, the reports available showed that analysts were actually sticking with strong price targets — and several firms raised their price targets. And at 22-times forward earnings, most analysts still consider Cisco a value stock with over 50% revenues as recurring versus many other networking and security plays.
Was Cisco’s report really that much of a red flag? Wall Street doesn’t seem to think so, and it is possible that the big post-earnings reaction of -8% was more based on profit taking than based on true fears. That said, the market’s reactionary verdict leaned more on profit taking and margin concerns than it did on low valuations and strong headline numbers.
WALL STREET RAISES CISCO’S TARGETS
Nearly ten analyst reports were seen after earnings and more reports are likely coming. So, here is what Wall Street analysts were reporting of the earnings report…
BofA’s report from Tal Liania reiterated a Buy rating while maintaining a $150 price objective. Cisco also remains on the firm’s US 1 list of best ideas (added April-2026). The positive views noted that networking strength underpins its raised outlook. Also noted was that core operations and AI momentum leave room for further upside, while demand durability outweighs valuation risks. BofA’s actual earnings (per share) of $4.33 in 2026 is forecast to be $5.08 this year, $5.47 next year, and $6.00 for fiscal year 2029. The BofA summary said:
Ex-Hyperscaler orders accelerated to 25%, while top-four Hyperscaler orders grew 100%+, underscoring broad-based demand. Core growth of 10% YoY in FY27 and a $7.5bn AI revenue target could prove conservative on the back of a durable demand cycle. Margin pressure and premium valuation spell risk, yet a constructive demand outlook could support further stock appreciation.
Morgan Stanley reiterated its Overweight and raised its target to $135 from $130, saying Cisco’s hardware “supercycle” continues across enterprise and AI customers. The Morgan Stanley summary noted:
“Cisco is seeing broad-based strength across core enterprise and hyperscaler AI, with improving share momentum as the company is facing fewer supply-chain challenges. Faster hardware mix is expanding gross margin pressure into FY27, but incrementals on AI business remain high… as we see it as a low-volatility way to get exposure to AI, and one of the best ways to position for enterprise investment in AI, particularly on-premise investment. While gross margin pressure weighs on follow-through on demand upside, still see risk-reward balanced more positively in the near term.”
CFRA reiterated its Hold and maintained its target at $125. This S&P unit report said:
Demand was strong globally and across customer groups, with momentum in enterprise, public sector, service provider, cloud, and telco markets. In Networking, Cisco highlighted sustained strength across the portfolio, saying growth continued across areas such as routing, optics, data center, campus, wireless, enterprise routing, and industrial IoT, and that this supported their view of a multiyear networking supercycle. Cisco described some caution around the timing and pattern of AI-related demand, emphasizing that hyperscaler orders are nonlinear, placed well in advance, and can create uneven conversion into revenue, which is why they framed their outlook prudently. In addition, growth rates later in the year could appear slower because comparisons become more difficult after stronger prior periods.
Below are some additional analyst ratings summaries with no formal ratings changes:
- Barclays (Equal-Weight) target to $123 from $121.
- Evercore ISI reiterated Overweight with a $150 price target.
- KeyBanc (Overweight) target to $135 from $130.
- Rosenblatt (Buy) target to $165 from $150.
- Truist (Buy) target to $140 from $125
- Wells Fargo (Overweight) target to $150 from $130.
Again, additional analyst reports will likely be seen on Friday. Cisco’s fresh close of $113.47 is still above the median point of its $65.75 to $130.37 range in the last 52-weeks. The consensus analyst price target is now closer to $139, up from $132 just a week earlier.
DISCLAIMER
Oggonomics never supports using any single research report as the sole basis to buy or sell any stock. Analysts can be wrong and the overall landscape can change in the blink of an eye. But how are investors to feel when Wall Street backs the stock even stronger right into a pullback? Some view it is a gift, but others may take the tact that it’s a value trap or that a slight dip in margins may be the sign of earnings compression ahead.
Be advised that all research ratings and price targets mentioned in this reporting have been assigned to each firm by name. Oggonomics does not issue formal ratings and price targets of its own. Do not forget that analyst research reports never come with assured profits, and there are never any assurances that upside price targets will be achieved even if the company delivers on its expectations.
