Cisco Systems Pushes Deeper into AI and Security Amid Undervaluation Debate
Cisco Systems (CSCO) is strengthening its ties to artificial intelligence and security through new partnerships and features. The company has introduced Splunk features, expanded its partnership with NVIDIA for on-premises AI, and collaborated with AWS on a multi-year joint product effort focused on AI-driven cyber risks.
The move comes as the stock price of Cisco Systems has risen 44.02% year to date, with a 63.87% one-year total shareholder return. However, the 90-day share price return has declined by 8.39%, indicating that enthusiasm for the stock may be cooling in the short term.
Bulls argue that Cisco Systems' AI push and security breadth are key drivers of its valuation, while bears point to slower recent growth and margins under pressure. The most popular narrative suggests that Cisco is undervalued at $110.56 per share, only slightly above its last close price of $109.51.
However, the company's appeal lies in its asymmetric positioning, exposure to a strong secular trend (AI), and defensive financial characteristics. Nevertheless, there are risks associated with this narrative, including AI orders softening from key hyperscalers or restructuring missteps undercutting the security and software transition.