JPMorgan's analysis highlights Cisco's (CSCO, Financial) potential for accelerated revenue growth, driven by the upcoming launch of its next-generation Catalyst high-performance switches. The new Catalyst-2026 series is expected to significantly boost Cisco's revenue, primarily due to higher average selling prices and faster adoption compared to the previous Catalyst 9K series.
Analysts led by Samik Chatterjee predict a 3% growth in port shipments, consistent with Cisco's historical trends, and a mid-term compound annual growth rate of 6% for Cisco's campus business revenue, surpassing previous years' 3%. The report assigns an "Overweight" rating to Cisco, with a target price of $73, up from the recent close of $66.06.
Cisco's performance has benefited from the global AI boom, with increased demand for high-performance networking equipment in data centers. The company's Q3 fiscal 2025 earnings reported an 11% sales increase to $14.1 billion, aligning with Wall Street expectations. Cisco's order growth, driven by AI infrastructure hardware, exceeded $6 billion, surpassing management's target ahead of schedule.
As AI applications like ChatGPT drive demand for AI infrastructure, Cisco's high-performance switches and routers remain essential. The company is also enhancing its software and SaaS services, accelerated by its acquisition of Splunk.
