Cisco's Record Year Fuels Optimism as AI Infrastructure Orders Soar
Cisco Systems has announced its best year ever, and the stock is finally being recognized as an AI infrastructure winner. The company posted record FY2026 results with AI orders totaling $9.3 billion, supporting a BUY rating and a price target of $151 with 22% upside.
The forward P/E ratio of 26 makes Cisco's valuation more balanced compared to Arista Networks and Hewlett Packard Enterprise. However, the company's non-GAAP gross margin fell to 66.3% from 68.4%, which could be a concern for investors.
Cisco CEO Chuck Robbins framed the year as 'very strong,' with record revenue of $63.33 billion and net income jumping 30.32%. The company also guided revenue to $72.2 billion to $73.4 billion and non-GAAP EPS to $5.05 to $5.11 in FY2027, which could drive the stock price higher.