HSBC Upgrades Cisco Systems (CSCO) on Surging AI Infrastructure Demand

Cisco Systems, Inc. (NASDAQ:CSCO) ranks among the best most active stocks to buy according to hedge funds. On May 15, HSBC boosted Cisco Systems Inc.’s (NASDAQ:CSCO) rating to Buy and hiked its price target to $137 from $77, citing a stronger-than-expected AI infrastructure demand pattern that has significantly changed the company’s growth profile. Analyst Stephen Bersey explained to investors that Cisco’s fiscal third-quarter results revealed a fundamental shift, with AI infrastructure orders totaling $1.9 billion for the quarter.

HSBC stated that Cisco’s Silicon One CPUs and Acacia optics led AI outperformance, which was supported by other hyperscaler design results. Total revenue increased 12% year-over-year to $15.84 billion, about 2% higher than expected, while non-GAAP EPS of $1.06 outperformed expectations by 2.5%.

Looking forward, Cisco management increased its fiscal 2026 AI infrastructure order aim to about $9 billion from $5 billion, assuming a significant Q4 increase, and boosted full-year AI revenue expectations to about $4 billion from $3 billion. Meanwhile, HSBC increased its fiscal 2026 to 2029 non-GAAP earnings per share CAGR projection to 13.6% from 9.8%, based on a higher 29x price-to-earnings multiple.

Cisco Systems, Inc. (NASDAQ:CSCO) is involved in the manufacture, design, and sale of Internet Protocol-based networking products and services associated with the communications and IT industry.

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