Cisco Systems (CSCO) is making a return to relevance as investors anticipate its fiscal third-quarter earnings report after the market close on May 13. What makes the outlook even more interesting is the fact that shares have rallied on speculation around higher AI infrastructure demand, switching, security, observability, and enterprise networking.
The problem is clear. With CSCO stock up 62% from its 52-week low of $60.85, the bar is not going to be particularly low. Investors will need to pay much more attention to whether Cisco has what it takes to sustain the current rally in light of growing expectations tied to AI infrastructure investments.
About Cisco Stock
Cisco Systems is a multinational technology firm based out of San Jose, California. The company is known primarily for its network hardware, software, cybersecurity, observability solutions, and collaboration technologies. In terms of market significance, Cisco Systems is a key player in the AI infrastructure space, with increasing demand for more advanced networking capability among corporations and hyperscalers. Cisco currently has a market capitalization of $389.9 billion.
In recent months, CSCO stock has been a standout performer among large-cap technology stocks. Shares are up 5% over the last five days and recently reached a fresh 52-week high of $99.93. The stock has also outperformed the broader market over the past year, up 60% compared to the S&P 500's ($SPX) 26% gain over the last 12 months.
It does get complicated when looking at valuation metrics. Cisco currently sports a forward price-to-earnings (P/E) multiple of 28.2 times, a price-to-sales (P/S) ratio of 6.7 times, and a price-to-book ratio of 7.9 times. This means CSCO stock is quite pricey compared to traditional tech players in the networking space. Additionally, the P/E-to-growth (PEG) ratio of 3.6 times highlights that investors are willing to pay a premium for stability, exposure to AI infrastructure, and software-oriented revenue growth.
Earnings Beat Expected From Cisco Systems
Cisco Systems is expected to report fiscal Q3 results on May 13 after the market close. The expectation seems to be relatively optimistic despite some challenges faced by the company last quarter. On average, Wall Street analysts expect Cisco to report non-GAAP EPS of approximately $0.86 for the April quarter, up 10% year-over-year (YOY) from $0.78. Revenue for the quarter is expected between $15.4 billion and $15.6 billion as AI infrastructure demand drives growth amid stable enterprise networking demand.
Unsurprisingly, AI infrastructure momentum remains the key point of focus among analysts and investors. Last quarter, Cisco reported $2.1 billion in AI infrastructure orders, which made investors bullish about the company's position amid ongoing data-center buildouts. Now investors are expecting an acceleration of this positive trend.
It is worth pointing out that Cisco Systems enjoys a great earnings track record. The company has beaten consensus EPS forecasts in each of the last four quarters, including the quarter ended January 2026, where it reported EPS of $0.88 versus an expected $0.82. Investors are hopeful for a similar outcome in Q3, which may keep CSCO stock hovering near all-time highs.
In the Q2 report, management also provided full-year fiscal 2026 guidance for revenue between $61.2 billion and $61.7 billion. Accordingly, a guidance revision and any comments related to enterprise investment, AI-related demand, and cybersecurity growth in the Q3 report could prove highly valuable to investors.
What Do Analysts Think of CSCO Stock?
Overall, analysts have a consensus “Moderate Buy” rating for CSCO stock. The mean price target sits at $89.24, which implies potential downside of 9% from current levels. The highest price target for Cisco stock is $110, while the lowest price target is set at $65 per share.
On the date of publication, Yiannis Zourmpanos did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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