Cisco Target Boost
BofA Raises Cisco Price Target to $150 Amid Record Revenue and $9B AI Orders
Bank of America raised its price target on Cisco Systems (CSCO) to $150 from $135 on June 8, 2026, reiterating a Buy rating after networking-focused discussions at its Global Technology Conference in San Francisco. The move followed a standout earnings report in which Cisco posted record quarterly revenue of $15.84 billion — a 12% jump year-over-year — and sharply raised its AI infrastructure order forecast to $9 billion for fiscal 2026, up from an initial $5 billion target, according to Yahoo Finance.
The BofA upgrade was not limited to Cisco. The bank also lifted price targets for Arista Networks (ANET) to $200 and Extreme Networks (EXTR) to $33, signaling broad confidence in AI-driven demand across the networking sector, Insider Monkey reported.
Cisco's AI Bet Drives Record Quarterly Revenue
Cisco's Q3 2026 earnings, released May 13, were the catalyst behind the analyst optimism. CEO Chuck Robbins told investors the results were driven by "the relevance of our technology for connecting and securing AI." The company saw networking product orders grow more than 50% year-over-year. Data center switching orders rose over 40%. Campus networking orders climbed more than 25%, according to Yahoo Finance.
AI infrastructure orders hit $1.9 billion in Q3 alone. Robbins projected the full fiscal year would reach $9 billion in AI orders — most of it coming from large hyperscale cloud customers. He framed the moment as a turning point: "The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment."
BofA Conference Seals the Second Price Target Hike
BofA had already raised its Cisco target once before — from $114 to $135 on May 26 — citing momentum in optical networking. But after hosting executives from Cisco, Arista, and Extreme Networks at its June 2–4 Global Technology Conference in San Francisco, analyst Tal Liani pushed the target higher again. He cited a clear shift in AI Ethernet deployments, moving from pilot programs into full production at data centers, according to Yahoo Finance.
A key technical driver is the rapid expansion of 800G optical networking — a faster, higher-capacity link technology used in AI data centers. BofA estimates the 800G market will grow nearly tenfold in 2026, with Cisco holding over 50% market share in the segment. Competitor Ciena holds roughly 30%.
Layoffs Mask a Major Talent Pivot Toward AI Silicon
Alongside the record revenue, Cisco announced a restructuring plan that will cut about 4,000 jobs — roughly 5% of its workforce. CFO Mark Patterson was direct about the intent: this was "really not a savings-driven restructure." Instead, it redirects talent and spending toward silicon, optics, and AI-specific roles. The plan will cost Cisco up to $1 billion in pre-tax charges, according to Yahoo Finance.
Patterson projected that AI-related revenue would hit at least $6 billion in fiscal year 2027. The company's Silicon One P200 chip — a custom networking processor — has been a key win with hyperscalers looking to move away from relying on a single vendor like NVIDIA for their data center networks. Cisco stock surged more than 13% the day after the earnings release.
Bulls See Upside, Bears Warn of Overvaluation Risk
Not everyone is buying the rally. Goldman Sachs holds a "Neutral" rating with a $125 target, arguing that while Cisco's AI wins are real, the broader enterprise networking rebound may already be priced into the stock. The concern is timing: investors may be paying today for gains that take years to fully materialize. Cisco's trailing price-to-earnings ratio now sits near 41x, per Insider Monkey.
Valuation-focused analysts at GuruFocus put Cisco's "intrinsic value" at roughly $67, calling shares 87% overvalued at current prices above $125. Adding to the skepticism, insiders sold $6.6 million in Cisco shares over the past three months. CEO Robbins himself sold 21,400 shares in late May — a detail that bearish analysts say suggests leadership sees limited near-term upside from current levels, according to Yahoo Finance.
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