Cisco Stock Tumbles as Piper Sandler Cuts Price Target Amid AI Growth Concerns

Cisco's stock price dropped 4.5% on September 22 after investment bank Piper Sandler lowered its price target from $132 to $125, citing concerns that industry growth may have peaked and raising doubts about the sustainability of the AI infrastructure boom.

Piper Sandler analyst James Fish maintained a 'Neutral' rating on Cisco but reduced expectations for the price-to-earnings multiple. He noted that market concerns are growing that the networking equipment industry's growth momentum may have already peaked, with Cisco's revenue growth rate potentially decelerating from its current high-growth trajectory back to single-digit levels.

Cisco has seen significant growth in recent years, with shares hitting an all-time high of $130.37 in June and rising approximately 57% to 58% over the past 12 months. The company reported strong fourth-quarter results last month, with revenue rising 18% year-over-year to $17.3 billion.

AI has become a major driver of Cisco's performance, with fourth-quarter AI infrastructure orders from hyperscalers reaching $4 billion and representing 43% of the $9.3 billion in full-year fiscal 2026 orders from this customer segment. However, Cisco's first-ever disclosure of full-year AI revenue guidance has sparked market concerns, with the company projecting AI-related revenue of approximately $7.5 billion for fiscal 2027.