Cisco Systems Inc: Network (and Sales) Traffic Picks Up with AI

Research evidence excerpt

Cisco Systems Inc: Network (and Sales) Traffic Picks Up with AI

Idea

May 14, 2026 02:53 AM GMT

Morgan Stanley & Co. LLCMCisco Systems Inc | North America Meta A Marshall

Equity Analyst

Network (and Sales) Traffic Meta.Marshall@morganstanley.comAntonio Jaramillo +1 212 761-0430

Research Associate

Antonio.Jaramillo@morganstanley.com +1 212 761-4438

Picks Up with AI

Cisco Systems Inc (CSCO.O, CSCO US)

What’s Changed Telecom & Networking Equipment | United States of

America

Cisco Systems Inc (CSCO.O) From To

Price Target $91.00 $120.00 Stock Rating Overweight

Industry View In-Line

Price target $120.00

Shr price, close (May 13, 2026) $101.87

Reaction to earnings Mkt cap, curr (mm) $404,337

52-Week Range $102.01-60.85

Strengthens our thesis Meaningful upside Modest revision higher

Impact to our thesis Financial results versus consensus Direction of next 12-month Fiscal Year Ending 07/25 07/26e 07/27e 07/28e

consensus EPS

EPS ($)** 3.80 4.27 4.68 4.96

Source: Company data, Morgan Stanley Research Prior EPS ($)** - 4.15 4.43 4.69

EPS ($)§ 3.79 4.16 4.51 4.89

CSCO's improved hyperscaler relationships are paying dividends, ModelWare EPS ($) 2.90 3.32 3.76 4.04

P/E 23.4 30.7 27.1 25.2

expecting AI rev to quadruple Y/Y in FY26. Combined with Div yld (%) 2.4 1.6 1.6 1.6

healthy enterprise investment cycle in AI preparedness, CSCO Unlessframeworkotherwise noted, all metrics are based on Morgan Stanley ModelWare

hitting growth rate not achieved in 15+ yrs; remain OW given **§ ==ConsensusBased on consensusdata is providedmethodologyby Refinitiv Estimates

untaxing mult relative to AI names and opps for upside. e = Morgan Stanley Research estimates Quarterly EPS ($)

2026e 2026e 2027e 2027e

Quarter 2025 Prior Current Prior Current

Key Takeaways Q1 0.91 - 1.00a 1.06 1.15