Watch This Robotics Demo Before July 23rd (From Brownstone Research)
Cisco Stock Eyes New Highs in 2025 on AI, Earnings, Upgrades 
For numerous reasons, Cisco Systems' (NASDAQ: CSCO) stock price will reach new highs in 2025 and continue to trend higher into 2026. Those include outperformance in FQ3, guidance for FQ4, AI, the analysts, and capital returns. The takeaway is that AI drives business strength, leading to improved guidance and a high likelihood of strong performance in F2026. The analysts are paying attention, lifting their price targets, and leading this market higher. How high Cisco’s stock price can go depends on how long the AI boost and the analyst upgrade cycle last, and it could be a considerable amount of time. Demand in existing markets is robust, and the new deals with Saudi Arabia’s HUMAIN will drive strength for Cisco, along with NVIDIA (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), and Super Micro Computers (NASDAQ: SMCI). As it is, the post-release activity includes nothing but price target increases, with the bulk leading to the $70-$75 range, a 15% upside sufficient to set a new all-time high. Other analysts' trends supporting Cisco’s stock price outlook include increased coverage and firming sentiment. 
Cisco’s Business Is Firing on All Cylinders in 2025, Aided by AI Cisco’s Q3 results are solid, with strengths in all segments, geographies, and end markets supported by AI demand. The company reported $14.15 billion in net revenue, up 11.4% YOY and 65 basis points ahead of MarketBeat’s consensus. The Americas was strongest with a 14% gain, followed by 8% and 9% gains in EMEA and APJC. Product sales led segmentally, up 15%, trailed by a 3% increase in services. All end markets produced growth, led by a 54% increase in Security, a positive sign for cybersecurity leaders like Palo Alto Networks. Large clients were also a driver, with web-scale businesses leaning hard into data center builds and the required networking. Margin news is also good. Depending on the comparison, the details are mixed on a GAAP and adjusted basis, but the net result is generally flat compared to last year. That left adjusted earnings at $0.96, about 200 bps above consensus, and a 9% investor gain. More importantly, cash flow and free cash flow remain solid to sustain balance sheet health and capital returns. The guidance is equally strong. The Q4 and FY targets have been lifted to ranges, and the analysts' consensus is at or below their low ends. Cisco is a capital-returning machine that pays an above-average dividend while trading at a below-average valuation and repurchasing significant shares. The dividend distribution annualizes to roughly 2.7% with shares near $65.50, about 16x current year earnings. That’s about half the valuation of leading AI infrastructure names, suggesting a robust upside potential. The share repurchases are aggressive, reducing the count by an average of 1.4% in Q3 and are expected to continue at that pace for the foreseeable future. The company has $15 billion left under its current authorization, or enough to last for about 10 quarters at the Q3 pace. Institutional Trends Provide Tailwind for CSCO Stock Price Action The institutional trends provide a tailwind for Cisco’s stock price action in 2025 and will likely continue to do so as the year progresses. The trends include reverting to buying on balance at the end of 2024 and accelerating the bullish activity in 2025. Given the outperformance and outlook for continued business strength, they own nearly 75% of the stock and are a solid support base unlikely to sell. The stock price action following the release was favorable. CSCO stock surged more than 5% to a closing high. Cisco’s stock price will continue to increase over the coming weeks and months, assuming the market follows through on this signal. If not, the CSCO market risks becoming range-bound at current levels until later in the year. Written by Thomas Hughes Read this article online › Read More: Did you like this article?  
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