Cisco Systems Inc (NASDAQ:CSCO) stock rose 0.35% (As on June 24, 11:11:53 AM UTC-4, Source: Google Finance) after Deutsche Bank upgraded the company to Buy from Hold with a price target of $73, up from $65. Deutsche Bank analyst Matthew Niknam announced the upgrade, with a corresponding increase in Cisco’s price target. The firm sees improved visibility towards “durable” mid-single-digit growth in upcoming years for Cisco, with tailwinds from artificial intelligence, a Campus portfolio refresh, more favorable near-term competitive dynamics in Networking and improved scale in Security. The bank’s bullish stance is also supported by several factors, including anticipated steady growth spurred by advancements in artificial intelligence, improved competition within the Networking division, and a bolstered Security segment.
Meanwhile, US President Donald Trump wrapped up his tour of the Middle East, concluding numerous high-profile deals and diplomatic engagements with countries such as Saudi Arabia, Qatar, and the United Arab Emirates (UAE). On his last stop of the Gulf tour, Trump inked a massive AI data centre project where the two countries will be partnering on an artificial intelligence campus. Trump noted that the United Arab Emirates and the United States had agreed on a path for the Gulf country to buy advanced AI semiconductors from U.S. companies. This marks a significant step forward in Abu Dhabi’s efforts to become a global AI hub. The AI agreement “includes the UAE committing to invest in, build, or finance U.S. data centres that are at least as large and as powerful as those in the UAE.”
Moreover, Cisco has reported third quarter revenue of $14.1 billion, up 11% and non-GAAP net income of $3.8 billion or $0.96 per share. Revenue by geographic segment was: Americas up 14%, EMEA up 8%, and APJC up 9%. Product revenue performance reflected growth in Security up 54%, Observability up 24%, Networking up 8%, and Collaboration up 4%. On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 68.6%, 67.6%, and 71.3%, respectively, as compared with 68.3%, 66.9%, and 71.6%, respectively, in the third quarter of fiscal 2024. Cash and Cash Equivalents and Investments were $15.6 billion at the end of the third quarter of fiscal 2025, compared with $17.9 billion at the end of fiscal 2024. Remaining Performance Obligations (RPO) were $41.7 billion, up 7% in total, with 51% of this amount expected to be recognized as revenue over the next 12 months.