Cisco Systems (CSCO) Stock Forecast & Price Target

Cisco Systems has demonstrated strong growth metrics, with total product orders rising by 13% year-over-year, reflecting robust demand, particularly from Service Providers which saw a remarkable 49% increase in orders. The company reported fourth-quarter revenues of $14.67 billion, marking an 8% year-over-year increase and exceeding estimates by approximately $70 million, driven by strong performance in AI infrastructure and campus networking solutions. Additionally, the re-acceleration of high-quality Product RPO growth at 10% and significant backlog growth to $10.3 billion underscore the positive momentum in Cisco's key business segments.

Cisco Systems faces a negative outlook due to the anticipated accelerated decline in hardware sales and the company's challenging transition to recurring Software and Services revenues. The public sector orders have shown a concerning decrease of 6% year-over-year, contrasting sharply with a previous increase of 8%, which may reflect broader market weaknesses. Additionally, persistent supply chain issues threaten to negatively impact both revenue and gross margins, exacerbating Cisco's financial vulnerabilities as it navigates the shift towards cloud subscriptions and next-generation technologies.