Cisco Systems should continue to be an AI beneficiary going forward, according to UBS. The bank upgraded the technology stock to buy rating from neutral. It also lifted its 12-month price target for the name to $88 per share from $74, which points to 20% upside. UBS analyst David Vogt pointed to surging AI infrastructure demand as a tailwind for the stock. Strength in AI orders at hyperscalers like Meta could drive Cisco’s revenue growth for the fiscal 2026 year to around 6%, or $60 billion, he said. This should exceed the guide of between 4% to 6% that the company set. CSCO YTD mountain CSCO YTD chart “Cisco secured > $2B in AI orders in FY25, nearly all from hyperscalers with two thirds full systems running Silicon One with the rest optics/optical,” he wrote. “Enterprise and Sovereign demand is now ramping, with Enterprise orders approaching $1B, up sharply from a couple hundred million $s in the most recent quarter positioning Cisco for sustained AI-fueled growth in FY26 and FY27.” A refresh in Cisco’s installed base to AI-enabled smart switches could also drive its campus market growth to around 7% in the fiscal 2027 year from 5% in the fiscal 2026 year. “If Cisco maintains share, which we believe is likely given the opportunity to swap out older 4K and 6K equipment in addition to the 9K base, Cisco’s Campus business should contribute at least 1 point of total Cisco revenue growth,” the analyst added. Vogt also applauded Cisco’s strong security portfolio, with next-gen products like the hypershield growing more than 20% and gaining traction. He added that capital expenditures growth from Cisco’s data centers should be a further revenue boost. “Additionally, data center capex growth at the top 4 U.S. hyperscalers should conservatively grow at a 20% CAGR the next three years with a bias higher driven by AI investments is a strong tailwind for revenue growth,” Vogt wrote. Shares of Cisco have rallied nearly 24% in 2025.
