Cisco Systems (CSCO) Stock Forecast & Price Target

Cisco Systems demonstrates a positive outlook driven by notable growth in product orders, which increased by 13% year-over-year, complemented by a 7% rise in remaining performance obligations to $42.9 billion, indicating strong future revenue potential. The company also reported impressive service provider order growth of 49% year-over-year, bolstered by significant orders from leading webscale customers, which reflects robust demand in key segments. Additionally, Cisco's total revenue of $14.9 billion for the fourth quarter grew 8% year-over-year and exceeded estimates, underscoring the company’s strong performance amid rising demand for AI infrastructure and networking solutions.

Cisco Systems faces a challenging landscape, highlighted by potential faster-than-expected declines in hardware sales and difficulties in transitioning to recurring Software and Services revenue. Additionally, a 6% year-over-year decrease in public sector orders raises concerns about demand in key markets, while challenges in the supply chain may lead to negative revisions in revenue and gross margins. Furthermore, although security revenue showed a year-over-year increase, it lagged behind estimates, indicating pressures from competition and shifts in customer preferences toward cloud subscriptions and next-generation products.