As of 7 December 2025, Cisco Systems’ stock is back near its historical highs and sitting squarely in the middle of the market’s AI infrastructure story. Strong fiscal 2026 guidance, an expanding AI order book, and deeper integration of the $28 billion Splunk acquisition have turned CSCO into one of the more closely watched “old-guard” tech names again. [1]
At the same time, the stock’s valuation has crept above its long‑term average, insiders have been net sellers in recent months, and at least some valuation models now flag potential downside even as others still see modest upside. [2]
This article pulls together the latest news, forecasts and analyses on Cisco stock up to 7 December 2025 and is intended as a neutral, information-rich guide. It is not personal investment advice.
Cisco stock today: price, performance and basic valuation
Cisco Systems (ticker: CSCO) closed at $77.97 on 5 December 2025, according to MarketBeat and Nasdaq data, leaving the company with a market value just over $300 billion. [3]
Over the past year, CSCO has climbed roughly 25–30%, helped by a sharp rally after its November earnings beat and guidance hike, and is trading close to levels last seen during the dot‑com era. [4]
On valuation:
- Most data providers put Cisco’s trailing P/E in the high‑20s to around 30x earnings. [5]
- The forward P/E based on fiscal 2026 estimates is typically in the 17–20x range. [6]
- Cisco’s dividend yield is about 2.1%, based on an annual payout of $1.64 per share. [7]
Simply Wall St calculates a DCF-based fair value of $82.36 per share, implying Cisco is about 5.3% undervalued at current prices, and concludes the stock is “about right” relative to underlying cash flows. [8]
By contrast, GuruFocus’ GF Value model estimates a one‑year fair value nearer $59, implying material downside if that model proves correct, while a long‑standing Trefis model pegs intrinsic value around $65 per share. [9]
The takeaway: the market currently prices Cisco at a premium to its historical averages, and third‑party valuation models are split between “modest upside” and “somewhat expensive.”
Q1 FY 2026 earnings: AI-driven beat and a higher outlook
Cisco’s most recent report, for Q1 fiscal 2026 (quarter ended 25 October 2025), showed a company leaning hard into AI networking and software, and willing to back that story with higher guidance. [10]
Key numbers from the company’s investor relations release:
- Total revenue: $14.9 billion, up 8% year over year.
- Product revenue: $11.1 billion, up 10%.
- Services revenue: $3.8 billion, up 2%.
- GAAP net income: $2.9 billion, EPS $0.72, up 5–6%.
- Non‑GAAP EPS: $1.00, up 10%, slightly above analyst expectations. [11]
Growth was broad but clearly led by the core networking business:
- Networking revenue rose 15%,
- Observability grew 6%,
- Security fell 2%, and
- Collaboration declined 3%. [12]
Geographically, the Americas climbed 9%, EMEA 5%, and APJC 5%. Gross margins remained in the mid‑60s on a GAAP basis and just over 68% on a non‑GAAP basis, signaling Cisco is still able to command healthy pricing power on its higher‑value hardware and software stack. [13]
The earnings strength wasn’t just about one good quarter. Cisco’s remaining performance obligations (RPO) – a measure of contracted but not yet recognized revenue – rose 7% to $42.9 billion, with product RPO up 10% and long‑term product RPO up 13%. Deferred revenue stands at $28 billion, underscoring the growing weight of subscriptions and recurring contracts in the business. [14]
Guidance: Cisco raises the bar for fiscal 2026
On 13 November, Cisco raised its full‑year fiscal 2026 outlook, explicitly tying the move to stronger‑than‑expected demand for AI‑driven infrastructure. [15]
Current guidance:
- FY 2026 revenue: $60.2–61.0 billion, up from a prior $59–60 billion range. [16]
- Non‑GAAP EPS: $4.08–4.14, versus a previous $4.00–4.06. [17]
- Q2 FY 2026 revenue: $15.0–15.2 billion, ahead of earlier Street expectations near $14.7 billion.
- Q2 non‑GAAP EPS: $1.01–1.03. [18]
CEO Chuck Robbins and his team framed this as an AI‑driven upgrade cycle that is still closer to the beginning than the end. AI‑infrastructure orders are coming from hyperscale cloud providers as well as sovereign and enterprise customers preparing their networks for much heavier AI workloads. [19]
AI infrastructure: the new growth engine
Cisco has spent years trying to prove it can still grow faster than global GDP. In 2025, the company is finally getting some credit for that effort – largely because of AI.
Recent updates highlight a fast‑ramping AI pipeline:
- Cisco has secured more than $2 billion in AI‑related orders for fiscal 2025, mostly from hyperscale cloud customers. [20]
- AI infrastructure orders from hyperscalers hit $1.3 billion in the Q1 FY 2026 quarter alone. [21]
- Management now expects roughly $3 billion in AI infrastructure revenue in fiscal 2026. [22]
Those orders are built around Cisco’s high‑end networking silicon and Ethernet-based data center platforms, including its Silicon One chips and Nexus switching portfolio. Reuters notes that Cisco now trades at a forward P/E around 18x, still at a discount to AI networking rival Arista Networks but at a premium to more traditional enterprise hardware names. [23]
Cisco is also positioning AI as a driver for:
- Campus refresh cycles, as enterprises upgrade switches, routers and Wi‑Fi to cope with heavier data and security demands. [24]
- Next‑generation venues: a recent multi‑year partnership makes Cisco the official networking partner of Madison Square Garden, with “AI‑ready” data centers and advanced wireless connectivity forming part of the value proposition. [25]
The company’s message is clear: AI isn’t just about GPUs and cloud platforms – it’s also about the high‑bandwidth, low‑latency, secure networks that connect everything together.
Splunk and the software shift
Cisco’s $28 billion acquisition of Splunk, completed in March 2024, is central to its claim that it is now one of the world’s largest software companies, not just a network hardware vendor. [26]
Cisco says the combination:
- Brings together network visibility, security analytics, and observability into a single data platform.
- Helps customers connect and protect every part of their digital footprint, from cloud workloads to on‑prem infrastructure.
- Is intended to accelerate Cisco’s revenue growth and be accretive to non‑GAAP EPS from fiscal 2026 onward. [27]
Post‑acquisition coverage of Cisco’s Q4 FY 2025 results highlighted how AI infrastructure and Splunk integration pushed quarterly revenue to about $14.7 billion with adjusted EPS of $0.99, both ahead of expectations, and helped AI‑related orders exceed $2 billion for the year. [28]
More recent analyst commentary, including a December “bull case” summary based on a value‑investing thesis, argues that Splunk plus Cisco’s broader software push are meaningfully lifting recurring revenue and should justify a higher earnings multiple than Cisco has historically enjoyed. [29]
Dividends, buybacks and shareholder returns
Cisco remains a dividend growth name as well as an AI narrative.
Recent dividend details:
- On 12 November 2025, Cisco declared a quarterly dividend of $0.41 per share, payable 21 January 2026 to shareholders of record on 2 January 2026. [30]
- The annualized dividend is $1.64 per share, implying a yield of about 2.1% at current prices. [31]
- Cisco has now increased its dividend for 13 consecutive years; payout ratios hover around 62–63% of earnings and roughly 51% of free cash flow, suggesting the dividend is well‑covered. [32]
Capital returns go beyond the dividend. In Q1 FY 2026 alone, Cisco:
- Returned $3.6 billion to shareholders.
- Paid $1.6 billion in dividends.
- Repurchased ~29 million shares for $2.0 billion at an average price of $68.28.
- Ended the quarter with $12.2 billion remaining under its stock repurchase authorization. [33]
For investors focused on total shareholder yield, the combination of a 2%+ dividend and a material buyback program is a notable part of the CSCO story.
What Wall Street is saying: consensus forecasts and key upgrades
Across Wall Street, Cisco currently sits in “cautiously bullish” territory.
MarketBeat’s latest compilation of analyst opinions shows: [34]
- Consensus rating: “Moderate Buy” based on 26 analysts.
- Breakdown: 17 Buy, 9 Hold, 0 Sell ratings.
- Average 12‑month price target: $84.14, implying ~7.9% upside from $77.97.
- Target range: $63 (low) to $100 (high).
Recent high‑profile moves include:
- J.P. Morgan: Maintained “Overweight”, raising its target from $80 to $90. [35]
- UBS: Upgraded Cisco from “Neutral” to “Buy” in early November with a target of $88, citing strong hyperscale AI orders; another note later lifted the target to around $90. [36]
- Bank of America: Reaffirmed “Buy” and raised its target from $76 to $85 after Cisco’s AI‑driven earnings beat. [37]
- Rosenblatt and Melius both have targets near $100, putting them at the very bullish end of the spectrum. [38]
- HSBC: Downgraded Cisco from “Buy” to “Hold” with a target of $69, highlighting more cautious expectations. [39]
Quant‑style valuation services are more mixed. GuruFocus’ GF Value model flags potential overvaluation at today’s price, while Simply Wall St and several DCF models suggest moderate undervaluation or fair value around the low‑$80s. [40]
Fresh December 2025 analysis: bulls, bears and traders
The first week of December 2025 has seen a flurry of CSCO commentary.
Fundamental bulls
A Finviz / InsiderMonkey “Bull Case Theory” article from 5 December emphasizes: [41]
- Record Q1 FY 2026 results and raised guidance.
- AI‑driven demand for data center networking, with Cisco expecting to ship its one‑millionth Silicon One chip in fiscal Q2.
- Broad‑based analyst upgrades and higher price targets following the earnings beat.
The piece frames Cisco as a “full‑stack AI and cloud platform” whose transformation towards recurring software, security and observability – supercharged by Splunk – justifies the current valuation and leaves room for further upside if AI infrastructure spending remains strong. [42]
A separate Motley Fool article on 6 December, “The Three Best Tech Stocks to Buy Before 2026,” names Cisco alongside more traditional high‑growth names, citing its sub‑30 P/E multiple, strong balance sheet, and dual appeal as both an AI beneficiary and a dividend payer. [43]
Valuation and “fair value” views
Simply Wall St’s December deep dive concludes that: [44]
- Cisco’s DCF‑based fair value is $82.36, about 5% above the current price.
- The stock’s PE ratio near 29.8x is close to its “Fair Ratio” of 30.21x once growth, profitability and risk are factored in.
- Overall, Cisco looks broadly fairly valued, not an obvious bargain nor an obvious bubble.
Technical and trading‑oriented takes
For shorter‑term traders, Stock Traders Daily’s “Understanding the Setup: CSCO and Scalable Risk” note on 6 December uses AI‑driven technical models and finds: [45]
- Strong near‑term sentiment, but
- “Elevated downside risk” if current support levels around $77–78 fail.
The service lays out specific long and short trading parameters around $77.33–78.41 with tight stop‑loss levels, underscoring that CSCO has become an actively traded momentum name in addition to a long‑term holding for institutions.
Institutional flows and insider activity
Institutional ownership in Cisco remains heavy – roughly 73% of outstanding shares are held by funds and other large investors, according to recent filings. [46]
New 13F disclosures in early December paint a nuanced picture:
- Cerity Partners LLC increased its Cisco position by 0.9% in Q2, to about 2.49 million shares worth $173 million. [47]
- Nkcfo LLC boosted its holdings by 36.4% to 165,050 shares, making CSCO its sixth‑largest portfolio position. [48]
- In contrast, the California Public Employees Retirement System (CalPERS)trimmed its stake by 9.7%, selling about 1.31 million shares and leaving it with 12.18 million shares valued around $845 million, still its 26th‑largest holding. [49]
MarketBeat’s synthesis of recent filings also highlights that corporate insiders have been net sellers, disposing of over 1.0 million shares (≈$80 million) over the last 90 days, including sales by CEO Chuck Robbins and other executives. [50]
Insider selling doesn’t automatically signal trouble—executives often sell for diversification or tax reasons—but it does contrast with the company’s ongoing buyback program and can temper the pure bullish narrative.
Key risks for Cisco stock
Despite the attractive AI story and improved growth profile, several risks are front and center in the latest research:
- Valuation risk
Cisco now trades at a P/E multiple notably above its 3‑ and 5‑year averages, which have sat closer to the high‑teens to around 20x. [51]
If AI spending slows or earnings disappoint, multiple compression could hit the stock even without an earnings decline. - AI and capex cyclicality
Much of the recent optimism is driven by cloud and hyperscale capex budgets. History suggests these cycles can be lumpy; a pause in AI build‑outs could quickly drag on orders. [52] - Security and software execution
While networking is growing strongly, Cisco’s Security segment declined 2% in Q1, and Collaboration continues to shrink. Integrating Splunk and turning the combined portfolio into consistent high‑growth, high‑margin software is a complex task. [53] - Competition
Cisco faces intense competition in data‑center networking from Arista and others, and in observability and security from a crowded field of cloud‑native vendors. Reuters notes that Cisco’s forward P/E remains below Arista’s but above more traditional hardware peers, leaving little room for missteps. [54] - Macro and enterprise IT budgets
Any broader slowdown in enterprise or telecom spending could pressure orders, particularly for large campus refreshes and telco deployments that Cisco still relies on.
Cisco stock outlook: who might CSCO appeal to now?
Putting it all together, the December 2025 picture of Cisco stock looks something like this:
Positives
- Clear, measurable AI tailwinds, with multibillion‑dollar AI networking orders already on the books and a path to ≈$3 billion in AI revenue in FY 2026. [55]
- A successfully closed Splunk acquisition that materially bulks up Cisco’s software, security and observability footprint. [56]
- Healthy balance sheet, margins and cash generation, with strong RPO and deferred revenue supporting visibility. [57]
- Shareholder‑friendly capital allocation via a 2%+ dividend, over a decade of annual increases, and an active buyback program. [58]
- A Street consensus around “Moderate Buy” with price targets modestly above current levels. [59]
Challenges
- A valuation now above Cisco’s historical multiples, with some models seeing fair value below the current share price. [60]
- Ongoing pressure in security and collaboration, areas critical to the long‑term software narrative. [61]
- Heavy reliance on a capex‑heavy AI build‑out cycle that may prove more volatile than the current optimism implies. [62]
- Recent insider selling and mixed institutional flows, even as others accumulate shares. [63]
For income‑oriented investors who want exposure to the AI infrastructure theme but prefer a profitable, dividend‑paying large‑cap over more speculative names, Cisco looks like a coherent candidate—albeit one that is no longer “cheap” in absolute terms. Growth‑focused investors chasing maximum upside in pure‑play AI or cloud software may view CSCO as more of a steady compounder than a high‑beta rocket
References
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