Do not overlook the synthetic intelligence potential of Cisco Methods , Citi mentioned. Analyst Atif Malik upgraded shares of the networking firm to purchase from impartial, citing a shrinking valuation hole relative to friends and a rising AI ethernet complete addressable market poised to hit $10 billion by 2025. “Whereas AI is at present a small piece of the biz (~2% of revs), we see the potential for a stronger contribution,” he wrote. “With extra AI coming, we’re incrementally extra constructive on the group and anticipate continued investor rotation out of semis/{hardware} into networking gear to profit group valuation.” Shares added 1.7% earlier than the bell and appeared poised to construct on their 7% year-to-date acquire. Malik lifted the agency’s worth goal to $62 from $52 a share, reflecting about 15% upside from Tuesday’s shut. The analyst views the addition of the corporate’s merchandise in Meta Platforms’ AI {hardware} as a possible boon and “constructive validation of CSCO’s expertise.” At the very least three main hyperscalers have already begun utilizing the corporate’s instruments in backend networks, and Malik views Cisco’s current $9 billion 2027 hyperscaler AI alternative forecast as probably understated. CSCO YTD mountain Shares this 12 months Malik additionally raised his EPS estimates for 2025 and 2026 by by 2% and 5%, respectively. “We imagine shares warrant a large low cost to networking peer valuation to replicate lingering share loss considerations, considerably tempered by rising AI alternatives,” he wrote. “Even at a 30+% discounted goal a number of to see common, we see significant upside to shares.”