HSBC upgraded Cisco Systems to a Buy rating and raised its price target on Friday [1].
This shift signals a turning point for the networking giant as it attempts to pivot toward artificial intelligence. The upgrade suggests that Cisco is capturing the infrastructure demand required to power the AI era, moving beyond its traditional hardware roots.
HSBC lifted the price target for Cisco to $137 from a previous $77 [1]. Analysts at the bank said an accelerating AI infrastructure order book and stronger-than-expected fiscal third-quarter earnings were the primary drivers for the rating change [1], [2].
Cisco reported fiscal third-quarter revenue of $15.8 billion [3]. The company also disclosed that it secured $5.3 billion in AI orders during the third quarter [4]. Following the announcement of these results and the earnings beat, Cisco stock rose approximately 16 percent [4].
Growth projections remain a central point of the current debate among analysts. HSBC has set a $6 billion AI revenue goal for the company [1]. Meanwhile, other reports indicate that Cisco has outlined roughly $9 billion in AI hyperscaler orders for fiscal year 2026 [3].
These figures highlight a massive scaling of operations to meet the needs of large-scale data centers. The surge in orders reflects a broader trend where enterprises are upgrading their physical network architecture to support the high-compute demands of generative AI models.
“HSBC lifted the price target for Cisco to $137 from a previous $77.”
Cisco's transition from a legacy networking provider to an AI infrastructure play is gaining institutional credibility. While the company has historically struggled to keep pace with the rapid growth of AI-specific chipmakers, the multi-billion dollar order backlog for hyperscalers suggests that the physical layer of AI—the switches and routers that connect GPUs—is becoming a primary growth engine.
