Analysts are intrested in these 5 stocks: ( (CSCO) ). Here is a breakdown of their recent ratings and the rationale behind them.
Cisco Systems has become a classic “strong numbers, cautious stance” story for analysts. Abhishek Shukla at HSBC has moved the stock to Hold, even as he acknowledges a powerful earnings beat in the fourth quarter of fiscal 2026 and guidance that outpaced Wall Street expectations. The message is clear: operationally Cisco is firing on all cylinders, yet the upside may already be priced in.
The networking giant delivered non‑GAAP earnings per share of $1.22 in 4Q26, up more than 23% year on year and comfortably above consensus. For FY27, Cisco is projecting revenue around $72.8 billion, a robust 15% jump, with non‑GAAP EPS guidance of $5.08 that sits well ahead of prior market forecasts, underscoring confidence in its near‑term growth path.
HSBC’s report highlights the networking segment as the key engine of this momentum. Segment revenue climbed 22.5% in FY26 to roughly $34.7 billion, driven by hyperscaler customers whose spending surged an estimated 273%. Cisco secured $9.3 billion in hyperscaler orders over the year, including a huge $4 billion wave in the fourth quarter alone, setting the stage for another year of elevated demand.
Management expects orders from hyperscalers in FY27 to be “meaningfully higher,” with revenue from these cloud‑scale clients almost doubling to about $7.5 billion. HSBC models continued strong growth from this subsegment, though at moderating rates in FY28 and FY29, broadly tracking expectations for data‑center growth at major AI chip suppliers like Nvidia and reflecting a normalizing cloud infrastructure cycle.
The cooling enthusiasm comes from valuation rather than operations. Cisco trades at about 20.9 times estimated 2027 non‑GAAP earnings, only slightly below the sector median, while its long‑term EPS growth is expected to settle near 8%, not the 10–15% many peers deliver. HSBC has cut its target price to $120 from $137 based on a lower earnings multiple, seeing just 5.8% upside and preferring other tech names where they believe growth and valuation align more attractively.