HSBC Just Upgraded Cisco to Buy: $6 Billion AI Revenue Goal Resets the Growth Debate

"HSBC upgraded Cisco from Hold to Buy and lifted its price target to $137 from $77. The trigger is straightforward: management's AI infrastructure order book is accelerating, and Cisco now expects fiscal 2027 AI revenue of at least $6 billion. For prudent investors, the call signals that Wall Street is finally giving Cisco credit for its AI franchise rather than treating it as a legacy networking incumbent."

"HSBC's thesis centers on Cisco's $6 billion AI revenue target for fiscal 2027, which implies 50% year-over-year growth in AI-specific revenue. That's hypergrowth for a meaningful slice of a business bears have long dismissed as low-growth. The firm cites stronger AI infrastructure momentum and better earnings visibility as the drivers of both the rating change and the $60 price target raise."

"The company already booked $5.3 billion in AI infrastructure orders year to date and raised its FY26 AI order target to $9 billion from $5 billion. HSBC sees a credible bridge from those orders to the FY27 revenue milestone. Cisco's AI order book has reset the growth debate."

"Cisco delivered record quarterly revenue of $15.841 billion in Q3 FY2026, up 12% year over year and ahead of the $15.56 billion consensus. Non-GAAP EPS of $1.06 marked the fourth straight quarterly beat, with net income jumping 35% to $3.373 billion. The networking segment grew 25% to $8.815 billion, fueled by data center switching orders up more than 40% and campus orders up more than 25%."

HSBC upgraded Cisco from Hold to Buy and raised its price target to $137 from $77. The upgrade is tied to accelerating AI infrastructure momentum and Cisco’s expectation of at least $6 billion in fiscal 2027 AI revenue. HSBC links the AI revenue target to strong year-over-year growth and improved earnings visibility. Cisco has booked $5.3 billion in AI infrastructure orders year to date and increased its FY26 AI order target to $9 billion from $5 billion. Cisco reported record Q3 FY2026 revenue of $15.841 billion, up 12% year over year, and non-GAAP EPS of $1.06, with a fourth consecutive quarterly beat. Networking revenue grew 25%, supported by data center switching and campus order growth.

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