Evercore Downgrades Cisco (CSCO.US) Rating to "In Line with the Market"

We have learned from sources that investment bank Evercore has downgraded its rating on Cisco (CSCO.US) from "outperforming the market" to "in line with the market", while maintaining a target price of $72 unchanged.

The analyst team led by Amit Daryanani stated: "We believe that the management's performance in expanding cloud computing/artificial intelligence (AI) markets is stable, and the company's overall strategy remains reliable. However, the current stock price has already largely reflected these positive factors, and the risk-adjusted return over the next 12 months will likely become more balanced."

The analysts pointed out that the downgrade was due to Cisco's stock price having approached its $72 target price (with a difference of less than 6%). The stock has recently performed strongly, with a cumulative increase of 46% over the past 12 months, far exceeding the 17% rise in the S&P 500 index.

The analysts added that Cisco's stock price growth is mainly driven by the cyclical recovery of its core enterprise network business and market optimism towards its cloud computing and AI businesses. The company has recently disclosed AI order data, further solidifying this market expectation.

However, the analysts believe that if Cisco does not disclose specific revenue data for its AI business, it will be difficult to recognize it as a winner in the AI field. Currently, the company only publishes AI order volumes and seems to have no intention of releasing detailed revenue information.

Daryanani's team also listed other constraints: order growth rate faces higher base pressure; security and observability businesses continue to perform poorly; campus network recovery benefits have largely been released, with growth momentum likely to be maintained for only one to two quarters; and the change in chief financial officer may lead the company to provide more conservative guidance on its 2026 fiscal year performance.