Is CSCO a good stock to buy? We came across a bullish thesis on Cisco Systems, Inc. on r/investing_discussion by Variant_Invest. In this article, we will summarize the bulls’ thesis on CSCO. Cisco Systems, Inc.’s share was trading at $118.33 as of May 26th. CSCO’s trailing and forward P/E were 39.44 and 24.94 respectively according to Yahoo Finance.
Photo by Markus Spiske on Unsplash
Cisco Systems, Inc. designs, develops, and sells technologies that help to power, secure, and draw insights from the internet in the Americas and internationally. CSCO is widely viewed by the market as a slow-moving legacy networking incumbent that missed the cloud transition and was outcompeted for years by more agile peers. That perception frames it as a low-growth, hardware-heavy business with limited relevance in the current artificial intelligence infrastructure cycle. However, the underlying business trajectory is increasingly diverging from that narrative.
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Cisco’s Silicon One architecture is now established in high-performance networking deployments, while its optics portfolio is benefiting from accelerating hyperscaler demand for bandwidth and routed optical capacity. The ongoing refresh cycle in the 8000 and Nexus product families is reinforcing its position as one of a very limited set of vendors capable of shipping at scale to the world’s largest cloud operators.
In parallel, the company’s security segment, strengthened by the Splunk acquisition, is beginning to integrate into a broader Cisco Secure Access ecosystem, with recurring revenue expansion and improving renewal dynamics suggesting that prior skepticism around the deal is fading. More than half of Cisco’s revenue mix has already shifted toward software and subscriptions, yet the market continues to value the company as if it were still a 2016-era hardware vendor growing at roughly 2%.
This creates a significant valuation gap, especially when compared to a $117 price target that reflects a more normalized multiple for a hybrid networking and software platform. The investment case is not predicated on Cisco becoming a high-growth pure-play security leader, but rather on the market re-rating a business that is already materially stronger, more recurring, more embedded in AI-driven networking demand, and more undervalued than consensus assumptions imply.
Previously, we covered a bullish thesis on Cisco Systems, Inc. (CSCO) by Kroker Equity Research in May 2025, highlighting transformation into software and AI infrastructure via Splunk integration. CSCO’s stock price has appreciated by 85.12% since our coverage. Variant_Invest shares a similar view but emphasizes re-rating from legacy hardware to an AI networking platform driven by Silicon One.
Cisco Systems, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 97 hedge fund portfolios held CSCO at the end of the first quarter which was 77 in the previous quarter. While we acknowledge the risk and potential of CSCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CSCO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
