KeyBanc Starts Cisco (CSCO) at Overweight, Citing Shift to Subscription and AI Tailwinds

Cisco Systems Inc. (NASDAQ:CSCO) ranks among the best cloud stocks to buy according to Wall Street analysts. On June 25, KeyBanc began coverage of Cisco Systems Inc. (NASDAQ:CSCO) with a price target of $77 and an Overweight rating. The firm attributed the optimistic outlook in large part to Cisco’s strategic shift toward a subscription-based revenue model in its networking and security divisions.

KeyBanc Starts Cisco (CSCO) at Overweight, Citing Shift to Subscription and AI Tailwinds

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According to KeyBanc, this change would improve the predictability and stability of the model, which should help valuation multiples. In contrast to five years ago, Cisco Systems Inc. (NASDAQ:CSCO) has undergone a significant change. KeyBanc states that the company’s ongoing mix shift toward subscriptions has resulted in more annual recurring revenue, a more stable revenue growth profile, and stronger gross margins excluding tariffs.

Strong industry trends that are bolstering Cisco’s expansion were also noted by the firm, such as enterprise cloud migrations and the momentum of AI, which should result in robust revenue growth.

Cisco Systems Inc. (NASDAQ:CSCO) is a well-known technology company that offers networking and IT solutions, leveraging artificial intelligence to increase network performance, security, and automation.

While we acknowledge the potential of CSCO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMD and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.