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Big tech companies such as Nvidia (NVDA), Microsoft (MSFT), Meta (META), and Alphabet (GOOGL) continue to dominate the artificial intelligence (AI) narrative in 2025. However, Cisco (CSCO) is another AI stock that is quietly flying under the radar.
Melius Research calls Cisco a “hidden” sovereign AI investment due to its overlooked relationship with Saudi Arabia. Analyst Ben Reitzes reiterated a “Buy” rating with $78 price target, noting Cisco's recent sovereign AI deals with Saudi Arabia and the United Arab Emirates to build secure cloud-based AI infrastructure.
Cisco is positioned as the “sovereign AI player no one is talking about.” The analyst expects product orders to accelerate, driven by sovereign demand and campus networking refreshes, and calls Cisco one of the most undervalued stocks under Melius’ coverage with strong AI positioning.
Cisco Is Betting Big On AI
Cisco Systems delivered robust fiscal third-quarter results that exceeded expectations while positioning itself as a critical player in the artificial intelligence infrastructure boom. In the April quarter, Cisco reported over $600 million in AI orders from webscale customers, helping the company to surpass its full-year $1 billion target ahead of schedule.
The networking giant reported revenue of $14.1 billion, up 11% year-over-year, driven by strong demand across its AI-focused portfolio. CEO Chuck Robbins highlighted the company’s rapid emergence in AI infrastructure as hyperscalers transition from InfiniBand to Ethernet-based solutions for AI training workloads.
Cisco’s AI strategy centers on three distinct pillars: AI training infrastructure for webscale customers, AI inference solutions for enterprise deployments, and AI-enhanced network connectivity.
Its Silicon One chip architecture has become central to its competitive advantage, enabling partnerships with five of the six largest webscalers and serving as the foundation for next-generation networking systems.
Moreover, strategic partnerships are accelerating Cisco’s AI ambitions. The networking heavyweight’s expanded collaboration with Nvidia (NVDA) positions Cisco Silicon One as the only third-party silicon included in Nvidia’s Spectrum-X Ethernet reference architecture.
This partnership enables the integration of Nvidia GPUs with Cisco’s networking infrastructure, targeting enterprise AI deployments where customers seek simplified and secure solutions.
International sovereign AI initiatives represent a significant growth opportunity. Cisco announced a strategic partnership with Saudi Arabia’s new AI company HUMAIN, contributing to massive infrastructure buildouts as part of Vision 2030. Similar collaborations with UAE-based G42 and participation in BlackRock’s (BLK) AI Infrastructure Partnership demonstrate Cisco’s global positioning in sovereign cloud development.
Cisco emphasized that enterprise AI adoption remains in early stages but shows promising momentum. Its AI inference solutions, delivered through reference architectures with NVIDIA, aim to simplify deployment for organizations lacking hyperscaler-level technical sophistication.
Innovation continues across Cisco's AI portfolio, including AI Defense for security applications, quantum networking capabilities, and AI-powered customer support tools. Over 60% of support cases now utilize AI-driven automation, demonstrating internal operational benefits while showcasing customer-facing AI capabilities.
Looking ahead, Cisco expects its AI infrastructure business to generate substantial revenue conversion in the second half of the year, with multi-year growth potential driven by expanding webscale deployments, emerging sovereign cloud projects, and accelerating enterprise adoption of AI inference technologies.
What Is the Target Price for CSCO Stock?
Analysts tracking Cisco stock expect adjusted earnings to grow from $3.73 per share in fiscal 2024 to $5.01 per share in fiscal 2029. Today, CSCO stock trades at a price-earnings multiple of 16.3x, above its 10-year average of 14.1x. If the tech stock is priced at 16 times forward earnings, it will trade around $80 per share in early 2029, above its current trading price near $64.
Out of the 21 analysts covering Cisco stock, 11 recommend “Strong Buy,” two recommend “Moderate Buy,” and eight recommend “Hold.” The average target price for CSCO stock is $71.28, indicating upside potential of over 10% from current levels.
