Bank of America is optimistic about the Cisco (CSCO.US) AI opportunity to raise the rating to “buy”

The Zhitong Finance App learned that Bank of America analyst Atif Malik raised the rating of Cisco Systems (CSCO.US) from “neutral” to “buy” and raised its target price from $52 to $62. This decision was based on optimism about the upcoming opportunities in the field of artificial intelligence. Although artificial intelligence currently accounts for only 2% of Cisco's revenue, Malik believes it has the potential to contribute more to the company. With the rise of artificial intelligence technology, investors are expected to prefer network equipment stocks, which will help increase Cisco's valuation. As of press time, Cisco's stock price in pre-market trading was up 1.8%.

Additionally, Malik raised Cisco's earnings forecasts for fiscal year 2025 and fiscal year 2026 by 2% and 5%, respectively. Malik anticipates that Cisco's upcoming quarterly results to be released on November 13 could be a “potential catalyst” to drive stock prices, particularly given the recent inclusion of Cisco in Meta (META.US)'s AI hardware portfolio.

He emphasized that although the market may be concerned that this poses a threat to Arista Networks (ANET.US)'s market share, he believes this is more of an endorsement of Cisco technology.

It is worth mentioning that analysts generally predict that Cisco's earnings per share for the next quarter will be $0.87, with revenue of $13.77 billion.