Cisco Systems Launches AI Defense Amidst Growing Cybersecurity Threats
Cisco Systems (CSCO) has unveiled the Cisco AI Defense, a new initiative aimed at supporting businesses as they adopt AI technologies. As AI becomes more prevalent, concerns such as data breaches and misuse of AI tools are increasing. Cisco AI Defense seeks to tackle these emerging threats by enhancing network visibility and control, allowing enterprises to safely embrace AI innovations.
This development marks an expansion of Cisco Systems’ already impressive cybersecurity portfolio, which continues to see robust demand for products like XDR, Secure Access, and Multicloud Defense suites.
Over the past 12 months, CSCO shares have climbed by 18.8%. While this is lower than the Zacks Computer and Technology sector’s growth of 31.5%, it does surpass the Zacks Computer – Networking industry average of 17.8%.
Cisco’s growth is fueled by its diverse offerings across sectors like cybersecurity, AI infrastructure, cloud solutions, and enterprise networking.
Review of One-Year Performance
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Currently, the stock is trading above its 50-day and 200-day moving averages, which indicates a bullish trend.
CSCO Stock Overview: Above Key Moving Averages
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Despite the positive trends, the CSCO stock carries a Value Score of C, indicating a potentially inflated valuation at this time.
In terms of forward 12-month price/sales ratios, CSCO trades at a premium of 4.2X, which is higher than its median of 3.7X and more than the industry average of 3.83X.
Current Price/Sales Ratio (F12M)
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Growing Portfolio Enhances Cisco’s Market Position
Cisco’s comprehensive portfolio includes products in cloud computing, software, security, and AI. This diversity supports its leadership position in the market.
In cloud solutions, Cisco’s advanced offerings like the 8000 Series Routers and Nexus Dashboard are improving multi-cloud connectivity, positioning the company as a leading provider in this space.
Increased demand for Cisco’s Nexus switches, particularly the 400-gig and 800-gig models, further strengthens its competitive advantage in private cloud infrastructure.
In the AI arena, Cisco’s collaboration with NVIDIA (NVDA) has yielded AI servers and AI PODs that simplify AI infrastructure through integration with NVIDIA’s AI Enterprise software.
Innovations in wireless technology include Cisco’s Wi-Fi 7 access points, which combine security and flexibility for smart workplaces, further expanding its product appeal.
Additionally, Cisco offers software solutions like AppDynamics for observability and Cisco SecureX for security management. Its collaboration tools, including Webex AI Agent, enhance customer service and operational efficiency.
Cisco has also secured a 5.5-year agreement with MGM Resorts International (MGM), allowing access to its extensive software portfolio. This partnership enhances guest experiences at MGM properties, showcasing Cisco’s influence in various industries.
Positive Outlook for Cisco’s 2025 Performance
For the second quarter of fiscal 2025, Cisco Systems anticipates revenues between $13.75 billion and $13.95 billion, with non-GAAP earnings projected to be 89 to 91 cents per share.
For the entire fiscal 2025, Cisco predicts revenues of $55.3 billion to $56.3 billion and non-GAAP earnings between $3.60 and $3.66 per share.
2025 Revenue Estimates Show Year-over-Year Growth
The Zacks Consensus Estimate for Cisco’s second-quarter fiscal 2025 revenues stands at $13.86 billion, reflecting an 8.36% growth year over year.
Additionally, the consensus estimate for earnings in the same period remains at 91 cents per share, indicating a 4.60% increase compared to the previous year.
For fiscal 2025, the Zacks Consensus Estimate for revenues is $55.93 billion, suggesting a year-over-year growth of 3.95%. Earnings estimates show a slight decrease from the previous year, with a consensus of $3.65 per share, reflecting a decline of 2.14%.
Cisco has exceeded the Zacks Consensus Estimate for earnings in the last four quarters, achieving an average surprise of 4.14%.
Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote
For the latest EPS estimates and surprises, visit Zacks Earnings Calendar.
Reasons to Consider Buying CSCO Stock
With a strong partner network that includes major players like Meta Platforms, Microsoft (MSFT), Lenovo, LTIMindtree, and AT&T, Cisco Systems is positioned for innovation and expansion. A growing portfolio and customer base suggest a stable outlook for CSCO in an evolving technology landscape.
Given its growth potential, CSCO’s current valuation appears justified.
Holding a Zacks Rank #2 (Buy), Cisco may present a compelling opportunity for investors to consider accumulating shares now. The complete list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.
Zacks Identifies Top Semiconductor Stock
Currently, this stock is only 1/9,000th the size of NVIDIA, which has surged over 800% since we recommended it. While NVIDIA remains strong, our new top chip stock has significant growth potential.
The company is set to benefit from the booming demand for Artificial Intelligence, Machine Learning, and the Internet of Things. Global semiconductor manufacturing is expected to grow from $452 billion in 2021 to $803 billion by 2028.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
