Cisco Systems (CSCO) is making bold strides in artificial intelligence (AI), and it’s paying off. The company is targeting $1 billion in AI infrastructure deals by 2025, with CEO Chuck Robbins confirming that it remains on track to hit this goal. In the first half of FY25, the company reported AI infrastructure orders of around $700 million. Looking ahead, Cisco is poised to benefit from strong demand for AI network infrastructure, increased investments in data capacity, and top-tier AI security solutions, which serve as significant growth drivers for the company.
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Yesterday, CSCO reported positive Q2 FY25 results, crediting the performance to AI infrastructure orders exceeding $350 million. Following the results, CSCO stock gained nearly 7% in after-market trading.
Cisco’s Next Big Leap in Infrastructure
The demand for AI workloads has skyrocketed, driving the need for strong infrastructure. Cisco is positioning itself as a key player with its advanced networking equipment, hybrid cloud solutions, and cutting-edge security systems, all essential for companies scaling AI applications.
During the recent earnings call, Robbins emphasized that enterprises are looking for end-to-end solutions to support their AI initiatives, and AI security has become a key priority for customers. He also highlighted strong momentum in Hypershield, Cisco’s AI-driven security solution for data centers. The company secured two eight-figure deals in Q2 FY25, indicating strong customer commitment to a revolutionary security approach.
How Could AI Power Fuel Cisco’s Stock Growth?
Cisco’s push into AI has already begun to influence investor sentiment. The AI-driven revenue opportunities provide a new growth avenue for a company traditionally focused on networking. Analysts believe the $1 billion projection could translate into stronger earnings growth and increased market share in the AI infrastructure segment.
As Cisco diversifies its revenue base, the stock could benefit from a re-rating by analysts, viewing it as a company well-positioned for long-term success in the AI space.
In the last 12 months, CSCO stock has gained 26%.
Is Cisco Stock a Good Buy Now?
As per the consensus rating on TipRanks, CSCO stock has a Moderate Buy rating, supported by a total of 13 recommendations. It includes nine Buys and four Holds. The Cisco share forecast is $65.33, which is 4.5% above the current price level.
