Cisco’s Upcoming Campus Switching Upgrade Cycle Poised to Drive Significant Revenue Growth and Market Position Enhancement

Cisco Systems (CSCO – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Meta Marshall from Morgan Stanley maintained a Buy rating on the stock and has a $67.00 price target.

Meta Marshall has given his Buy rating due to a combination of factors, primarily focusing on Cisco’s upcoming campus switching upgrade cycle. The company is poised to benefit from a significant refresh of its Catalyst 9K installed base, which is expected to begin in FY26. This upgrade cycle, occurring approximately eight years after the last one, is anticipated to drive substantial growth, potentially contributing 300-370 basis points to Cisco’s revenue in FY26. The upgrade is likely to boost Cisco’s market position and help close the valuation gap with the S&P 500.
Additionally, the campus switching segment is a crucial part of Cisco’s business, representing a significant portion of its product revenue. The previous upgrade cycle in FY18/FY19 resulted in notable revenue growth, and a similar outcome is expected with the upcoming refresh. Furthermore, the potential for additional growth through WiFi upgrades, AI advancements, and Splunk integration could push Cisco’s growth rate to 5% or higher in FY26. These factors collectively support the Buy rating, despite macroeconomic risks that could potentially delay the refresh cycle.

In another report released on May 15, J.P. Morgan also maintained a Buy rating on the stock with a $73.00 price target.

Based on the recent corporate insider activity of 93 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CSCO in relation to earlier this year.