Investing.com -- Deutsche Bank revealed in a note Monday that it has upgraded Cisco Systems (NASDAQ:CSCO) shares from Hold to Buy, citing improving growth visibility and strengthening AI-related demand.
The bank also raised its price target on the stock from $65 to $73, implying upside from the last closing price of $64.09.
The bank sees “improved visibility towards durable mid-single-digit growth in upcoming years,” Deutsche Bank (ETR:DBKGn) wrote, pointing to tailwinds across AI infrastructure, enterprise deployments, and sovereign spending.
“Tailwinds from AI (across webscale, enterprise and sovereign), a Campus portfolio refresh, more favorable near-term competitive dynamics in Networking and improved scale in Security” are all expected to support revenue momentum, the note said.
Cisco’s earnings outlook is also strengthening, with Deutsche Bank now forecasting a “high-single-digit (7-8%) EPS CAGR looking forward.”
This growth, the analysts noted, is underpinned by an increasingly attractive revenue mix, with 56% of total revenue now coming from subscription software and services. The shift is expected to support stable margins and allow for continued reinvestment.
The firm also sees Cisco’s global supply chain strength as a key competitive advantage. “Cisco’s breadth of supply chain enables it to more deftly navigate incremental tariffs and re-invest in growth,” Deutsche Bank said, referring to ongoing trade tensions and the potential for increased cross-border duties.
The analysts believe that Cisco is showing “increasing visibility towards delivering on targets.”