Cisco Shares Trade Near 52-Week High: What's Next for CSCO Investors?

Cisco Systems CSCO shares closed at $69.27 on Wednesday, slightly lower than the 52-week high of $69.78, which it hit on June 30. Year to date (YTD), CSCO shares have appreciated 17%, beating the Zacks Computer & Technology sector as well as close peer Extreme Networks EXTR. The broader sector and Extreme Networks shares have appreciated 7% and 8.3%, respectively, over the same timeframe.Cisco’s aggressive AI push and growing security dominance have been major growth drivers. Cisco secured AI infrastructure orders worth more than $1 billion to date in fiscal 2025, a quarter ahead of schedule. The momentum is expected to continue in the near term thanks to an expanding portfolio and collaboration with NVIDIA NVDA. The company is expanding its AI portfolio for data centers with new solutions like the Unified Nexus Dashboard, Cisco Intelligent Packet Flow, configurable AI PODs and 400G bidirectional (BiDi) optics. Moreover, Cisco’s expanded partnership with NVIDIA, under which the companies plan to offer solutions that help build AI-ready data center networks, is a game changer.CSCO Stock’s Performance Image Source: Zacks Investment Research The stock is currently trading above the 50-day and the 200-day moving averages, indicating a bullish trend.CSCO Stock Trades Above the 50-Day & 200-Day SMAs Image Source: Zacks Investment Research CSCO’s Growing Security Business is a Key CatalystCisco’s security business is benefiting from strong demand for both Cisco Secure Access, Hypershield and XDR. In third-quarter fiscal 2025, orders grew double-digit, and the momentum is expected to continue as Splunk’s solutions continue to gain traction. The acquisition of Snap Attack enhances Splunk’s capability. Cisco Secure AI Factory with NVIDIA is founded on the NVIDIA Spectrum-X Ethernet networking platform. Security is at the core of the solution and helps enterprises simplify, deploy, manage and secure AI infrastructure at any scale. NVIDIA Spectrum-X Ethernet networking based on Cisco Silicon One supports NX-OS, Nexus Hyperfabric AI and SONiC deployments. Cisco’s partnership with ServiceNow NOW is also noteworthy in this regard. The companies are combining Cisco’s AI Defense capabilities with ServiceNow SecOps to offer more holistic AI risk management and governance.Cisco’s strategy of infusing AI across Security platforms and developing Agentic capabilities across the portfolio is a key catalyst. In May, Cisco unveiled Duo Identity and Access Management (IAM) solutions that help enterprises fight continuing identity-based attacks. Duo IAM strengthens Cisco’s approach to user-friendly Zero Trust security.In June, the company announced enhanced security solutions embedded deep into its networking infrastructure that will help companies implement zero-trust architectures. Cisco’s Hybrid Mesh Firewall and Universal Zero Trust Network Access (ZTNA) solutions simplify policy management, enhance visibility and enable enterprises to scale securely.CSCO Offers Positive 2025 GuidanceFor fiscal 2025, CSCO expects revenues to be $56.5-$56.7 billion, up from the previous guidance of $56-$56.5 billion. Non-GAAP earnings are now expected between $3.77 per share and $3.79 per share, better than the previous guidance of $3.68-$3.74 per share.The Zacks Consensus Estimate for CSCO’s fiscal 2025 revenues is pegged at $56.59 billion, indicating growth of 5.18% on a year-over-year basis. The consensus mark for CSCO’s fiscal 2025 earnings is currently pegged at $3.79 per share, unchanged over the past 30 days, indicating year-over-year growth of 1.61%. Cisco Systems, Inc. Price and Consensus Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote Cisco Shares Are OvervaluedCisco shares are trading at a premium, as suggested by the Value Score of D. In terms of the forward 12-month price/sales, CSCO is trading at a premium of 4.65X, higher than the Zacks Computer Networks industry’s 4.54.Price/Sales Ratio (F12M) Image Source: Zacks Investment Research Cisco shares are trading at a premium compared to Extreme Networks. In terms of the forward 12-month P/S, Extreme Networks shares are trading at 1.97X.  Here’s Why Cisco Stock is a HoldAn expanding portfolio makes Cisco well-positioned for sustained growth in an evolving tech landscape. AI push is noteworthy, along with a growing footprint in the security space. These trends bode well for CSCO’s long-term prospects. So, investors who currently hold the stock should continue to do so.However, a challenging macroeconomic condition due to uncertainty over tariffs, as well as stiff competition in the networking and security domain, is expected to hurt Cisco’s prospects in the near term. A stretched valuation is a concern.CSCO currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a better point to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Extreme Networks, Inc. (EXTR): Free Stock Analysis Report ServiceNow, Inc. (NOW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks