Why Cisco Systems Stock Is Gaining Today

Core Viewpoint - Cisco Systems reported strong fiscal Q2 results, exceeding Wall Street expectations, which has led to a rise in stock price and increased analyst optimism regarding the company's future performance [2][3]. Financial Performance - Cisco reported non-GAAP earnings per share of $0.94 on sales of $13.99 billion, surpassing analyst estimates of $0.91 EPS and $13.87 billion in sales [3]. - Revenue increased by 9.4% year over year, with AI infrastructure orders reaching $350 million [3]. - Product orders rose by 29% annually, or 11% when excluding contributions from Splunk [3]. Dividend and Share Repurchase - The company announced a quarterly dividend increase to $0.41 per share, representing a 3% rise from the previous level [4]. - Cisco's board authorized an additional $15 billion for share repurchases [4]. Future Guidance - For fiscal Q3, Cisco projects sales between $13.9 billion and $14.1 billion, with adjusted EPS expected between $0.90 and $0.92 [5]. - Full-year sales are anticipated to be between $56 billion and $56.5 billion, with adjusted EPS projected between $3.68 and $3.74 [5]. Analyst Sentiment - Following the earnings release, multiple analysts raised their price targets for Cisco stock, citing AI-related growth as a key factor [6]. - Rosenblatt upgraded Cisco from neutral to buy, increasing the price target from $66 to $80 per share [6]. - J.P. Morgan maintained an overweight rating, raising the price target from $69 to $73 per share, highlighting strong demand indicators [7]. - Bank of America also maintained a buy rating, increasing the price target from $72 to $76 per share, driven by expectations of AI infrastructure expansion [8].