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Cisco (CSCO) has been on an impressive run over the past year, with its stock soaring 42.5% and reaching a fresh 52-week high on Tuesday, June 24. Moreover, the strength across the company’s key performance metrics suggests that CSCO stock has further room to run.
Cisco reported solid momentum in future revenue growth drivers during its latest quarterly earnings report (Q3). The company’s annualized recurring revenue (ARR), subscription-based income, and remaining performance obligations (RPO) showed healthy growth. Cisco’s total ARR stood at $30.6 billion at the end of the quarter, an increase of 5%, with product ARR growth of 8%. Meanwhile, total subscription revenue grew 15% to $7.9 billion and represented 56% of Cisco’s total revenue. Total RPO was $41.7 billion, up 7%. The strength in these key performance metrics suggests solid growth ahead, which will support its share price.
Moreover, a significant catalyst behind Cisco’s recent strength is the growing opportunity in the artificial intelligence (AI) infrastructure market. The company has already secured more than $1 billion in AI-related infrastructure orders so far this fiscal year, surpassing its 2025 goal by a full quarter. Notably, in the third quarter alone, it booked over $600 million in orders from large-scale web customers, reflecting the robust demand for its AI-capable hardware and networking solutions.
While Cisco is well-positioned to capitalize on the AI-driven opportunities, analysts’ average price target of $71.94 for CSCO stock indicates limited upside potential. Nonetheless, the highest analyst price target for CSCO stock is $79, suggesting potential upside of over 17% from its recent closing price of $67.38 on June 23.
Cisco Seeing Solid Product Demand
Cisco’s momentum is driven by strong demand for its products across its portfolio. Networking product orders saw double-digit growth in the latest quarter, driven by strength in enterprise routing, switching, and industrial IoT offerings. Campus switching orders also rose by high single digits year-over-year, even against a challenging comparison from last year. Additionally, Cisco experienced a triple-digit sequential increase in orders for its Wi-Fi 7 products, underscoring interest in its latest wireless networking technologies.
Cisco’s Industrial IoT offerings, including ruggedized Catalyst products, posted a 35% year-to-date increase in orders. As industries and governments invest in domestic infrastructure projects, Cisco is well-positioned to benefit by delivering scalable, secure connectivity solutions.
The data center space is another bright spot, with switching orders up double-digits compared to the same period last year. Cisco’s broad portfolio of switching products, enhanced with built-in security features, is proving attractive as enterprises revamp their data centers to handle the demands of cloud, AI, and edge computing.
AI remains a key growth catalyst. Cisco continues to build momentum with enterprise customers seeking scalable and secure AI deployment solutions. Its strategic partnership with Nvidia (NVDA) further strengthens its ability to deliver end-to-end AI infrastructure. Moreover, the sovereign AI cloud market, driven by governments and large enterprises seeking localized AI compute resources, is also expected to ramp up, and Cisco is well-positioned to be a key systems provider in this emerging space.
Security is another area where Cisco is seeing gains, bolstered by its acquisition of Splunk. A landmark deal with a significant financial institution marked the largest in Splunk’s history. Further, new security offerings like Secure Access, XDR, and Hypershield are gaining momentum, adding over 370 new customers in the quarter.
What’s Ahead for Cisco Stock?
Cisco’s decent run over the past year reflects the company’s continued shift toward recurring revenue, solid growth in subscription-based services, and robust order activity across AI infrastructure and security products.
While analysts have a “Moderate Buy” consensus rating on CSCO stock and their average price target suggests a modest upside, Cisco's expanding role in AI, industrial IoT, and cybersecurity indicates the potential for continued gains.
