Morgan Stanley analysts raised their price target for Cisco after the company reported earnings and saw a double-digit surge in share prices [1, 2].
The move signals a shift in market confidence regarding Cisco's ability to capitalize on the artificial intelligence boom. While the networking giant has faced transitions in recent years, the current growth in product orders suggests the company is successfully integrating AI into its core offerings.
Analysts at Morgan Stanley said the stock remains cheap despite the recent rally [2]. The firm pointed to accelerating product orders as a primary driver for the price target increase [2]. This growth is specifically linked to the rising demand for AI-capable infrastructure, which is prompting enterprises to upgrade their hardware and software stacks [2].
This latest adjustment follows a pattern of post-earnings evaluations for the company. Morgan Stanley had previously raised its price target for Cisco following the company's earnings release in October 2024 [1]. The recurring trend suggests a sustained positive outlook from the investment bank regarding Cisco's long-term trajectory.
Cisco, which trades under the ticker CSCO on the NASDAQ, has seen its shares move significantly this week [2]. The surge reflects a broader market trend where legacy tech companies are being re-evaluated based on their potential to provide the underlying plumbing for generative AI applications [2].
The analysts said the stock's current valuation does not yet fully reflect the potential upside provided by these accelerating orders [2]. By raising the target, the firm indicates that further growth is expected as AI demand continues to scale across global markets [2].
“Morgan Stanley analysts raised their price target for Cisco after the company reported earnings”
This price target increase highlights a critical transition for Cisco from a legacy networking provider to a key player in the AI infrastructure cycle. When major investment banks like Morgan Stanley signal that a stock is still 'cheap' despite double-digit gains, it suggests they believe the market is underestimating the scale of AI-driven hardware refreshes. This could trigger further institutional investment as other firms seek to mirror this bullish outlook.
