We're increasing our Cisco Systems price target after an AI-fueled beat and raise (www.cnbc.com)

Cisco beat and raised guidance, driven by a surge in AI-driven networking orders. Q1 fiscal 2026 revenue was $14.88B vs. $14.76B consensus and non‑GAAP EPS was $1.00 vs. $0.98 est.; shares jumped over 7% after hours. Product orders accelerated 13% year‑over‑year (product revenue $7.77B), with networking orders growing high‑teens — helped by $1.3B of hyperscaler AI orders this quarter (up from ~$800M prior) and roughly $1B of hyperscaler AI revenue in FY25 that management expects to become ~$3B in FY26. Cisco also repurchased $2B of stock and yields ~2.2%, while trading at about 19.5x forward EPS after management raised full‑year revenue and EPS guidance. Technically, the beat underscores Cisco’s role as an AI infrastructure play: strong demand for service‑provider routing, data‑center switches, enterprise routing, campus switching, wireless, servers, and a growing >$2B pipeline for high‑performance networking. Cisco’s N9100 — an Nvidia Spectrum‑X partner switch — and partnerships with Nvidia and AMD position it to supply hyperscalers, neoclouds and sovereign clouds. The Security segment lagged (revenue -2% YoY), attributed to cloud‑subscription revenue recognition timing after the Splunk deal, but management expects recovery. Elevated orders and higher‑margin subscription mix support a raised price target and reinforce Cisco’s strategic positioning in the AI buildout.