Shares of Cisco rose about 1.6% in premarket trading after Evercore ISI upgraded the company to Outperform, citing a view that Cisco can achieve "high single-digit sales and low-teens EPS growth on a multi-year basis." The analyst firm also raised its price target on the stock to $100 from $80 and described the valuation as attractive at "under 20x P/E vs. large cap tech peers."
Evercore ISI identified four principal drivers that informed the upgrade. First, the firm points to an accelerating cycle in enterprise networking, with its checks indicating "sustained growth in campus markets through CY26 (~6-8% industry growth)." That demand is tied to customers upgrading to next-generation campus solutions roughly eight years after the last major refresh.
Second, Evercore ISI highlighted Cisco's transition toward End of Life and End of Services for legacy Catalyst 4K and 6K hardware. That legacy base represents "~20% install base," and the firm views the transition as a source of additional momentum for sales of new campus offerings.
Third, the research note emphasized rising AI-related demand. Evercore ISI estimates Cisco is on track to generate "AI revenues of ~$3.0B in FY26E (~5% of sales) and orders of >$4.0B (vs. $2.0B LY)," and said this trajectory is supported by four major hyperscaler customers. The firm cited new products such as the P200 and growing adoption of Silicon One as additional catalysts for AI-related growth.
Fourth, Evercore ISI pointed to a recovery in traditional enterprise and telecom markets, which the firm said will provide "better diversity of growth as we move forward."
On profitability, Evercore ISI contends Cisco can deliver approximately "~50-100bps of EBIT margin expansion annually." The note also cautioned that performance in security and collaboration remains a risk to the outlook.
Overall, Evercore ISI concluded that the combination of campus upgrades, mounting AI momentum and improving end markets provides Cisco with "plenty of tailwinds" to support a sustained growth outlook, supporting the upgrade and higher price target. The firm’s valuation argument - trading under 20 times earnings relative to large cap tech peers - underpins the call.