Cisco Systems (CSCO) Stock Forecast & Price Target

Cisco Systems is experiencing significant growth across multiple segments, highlighted by a 27% year-over-year increase in enterprise orders and a 29% year-over-year growth in total product orders, which marks the fourth consecutive quarter of accelerating order growth. Additionally, the company's service provider orders have rebounded strongly, demonstrating a remarkable 75% year-over-year increase, with telco orders rising 20% year-over-year as customers align their strategies with AI connectivity. Moreover, Cisco's security revenue has shown robust performance, reaching $2.1 billion and growing 117% year-over-year, further contributing to the overall positive financial outlook for the company.

Cisco Systems faces a potentially concerning decline in hardware sales, with expectations that the transition to recurring Software and Services revenues may prove to be more difficult than initially projected. Additionally, the ongoing challenges within the supply chain could adversely affect revenue and gross margins, evidenced by a 1% year-over-year decline in revenue when excluding contributions from Splunk. Lastly, the current government budget cuts may restrict Cisco’s revenue growth prospects, compounded by the risk of near-term earnings per share dilution from large deals.