Cisco (CSCO) PT Raised to $135 at Morgan Stanley

Morgan Stanley analyst Meta Marshall raised the price target on Cisco (NASDAQ: CSCO) to $135.00 (from $130.00) while maintaining a Overweight rating.

The analyst comments "Need to address technical debt AI traffic (from hyperscalers and enterprise) is causing a meaningful investment in networking / security equipment Core growth ex-hyperscalers is tracking ~10% (~50% from pricing), while hyperscaler AI revenue is expected to reach $7.5B in FY27 (almost ~90% Y/Y growth) Result is lifting FY27 revenue growth estimates meaningfully, but the elevated hardware component is pressuring GMs in the near term (~200bps) Supply availability is helping with share gains with cloud customers, while lower GMs are partly offset by lower opex intensity and stronger operating leverage."

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