HSBC Raises Cisco Price Target to $137 as AI Orders Surge to $1.9B
HSBC upgraded Cisco to Buy and raised its price target to $137 from $77 after Q3 AI infrastructure orders surged to $1.9 billion, up from $600 million year-on-year, and YTD orders hit $5.3 billion. Management increased fiscal 2026 AI orders target to $9 billion (from $5 billion) and raised AI revenue guidance to $4 billion.
1. Upgrade to Buy and Price Target Revision
HSBC elevated Cisco to Buy, boosting its price objective to $137 from $77 to reflect accelerated growth prospects in AI networking infrastructure.
2. Surge in AI Infrastructure Orders
Cisco reported AI infrastructure orders of $1.9 billion in fiscal Q3, compared with $600 million a year earlier, bringing year-to-date AI orders to $5.3 billion.
3. Enhanced Guidance for AI Revenues
Management lifted its fiscal 2026 AI orders target to $9 billion from $5 billion and increased full-year AI revenue guidance to $4 billion from $3 billion, while guiding for at least $6 billion in AI revenue in fiscal 2027.
4. Strategic Drivers and Valuation
Key contributors include Cisco’s Silicon One chips, Acacia optics and hyperscaler design wins, prompting HSBC to raise its non-GAAP EPS CAGR forecast to 13.6% through 2029 and apply a 29x P/E multiple to the stock.