What Could Surprise Cisco Stock Investors On The Upside?

Cisco Systems (CSCO) stock returned 62% over the past 12 months (as of Ssptember 28, 2026). After that run, you pay 31.8 times its past year’s earnings, against 22.1 for the S&P 500. At that price, the stock appears to assume growth that has not happened yet, so further upside would need something beyond that. So what could still surprise Cisco Systems investors on the upside?

Cisco’s Upside Surprise Could Come From AI Orders

The surprise could come from AI infrastructure for hyperscalers. That is the networking gear Cisco sells to the largest cloud companies. Cisco took $9.3 billion of these orders in fiscal 2026. Management expects $7.5 billion of revenue from this business in fiscal 2027. So Cisco has taken more orders than it plans to count as sales in fiscal 2027.

An order is a customer’s promise to buy. It becomes revenue only when Cisco delivers the equipment. Sometimes orders are larger than the sales forecast. Then sales can come in above that forecast if Cisco delivers sooner than planned.

The business is already growing fast. It made up about 6% of Cisco’s total revenue in fiscal 2026. That was up from less than 2% in fiscal 2025. Cisco also landed three new design wins with hyperscalers in fiscal Q4 2026. A design win means a customer picked Cisco’s Silicon One chips or its optics for a new build. Even after that jump, AI infrastructure is still a small part of Cisco’s sales.

How Much Could AI Add To Cisco’s Sales?

If Cisco hits its AI target, that business would make up about a tenth of its sales in fiscal 2027. That is because Cisco guided for total fiscal 2027 revenue of $72.2 billion to $73.4 billion. So AI would become a real part of Cisco, but most of the company would still be everything else.

Cisco as a whole is also growing faster than it was. Revenue growth rose in every quarter of fiscal 2026, from 7.5% in fiscal Q1 to 17.6% in fiscal Q4. Management said about 5 points of that fiscal Q4 growth came from price increases. Management also said that without AI, the core business would grow at about 10% under its fiscal 2027 guide. Given the high multiple you pay, the price appears to assume that Cisco delivers its fiscal 2027 guide. So one route to an upside surprise would be AI sales that beat Cisco’s own target.

Cisco stock fell nearly 5% on September 22, 2026. The drop came after Piper Sandler analysts raised concerns that industry growth is peaking. The shares are down 9.0% over the past three months, against a 3.5% gain for the S&P 500.

Can Cisco Turn Those Orders Into Sales Faster?

Cisco has not promised it. On the August 12, 2026 call, the question came up whether the AI target was very conservative next to fiscal 2026 orders. Management answered that these orders are very large, uneven, and usually placed well ahead of time. So management called the target a prudent guide for the year.

Management also said comparisons with the prior year get much tougher in the second half of fiscal 2027.

One sign that AI demand is still growing would be more design wins. Management said on the August 12 call that it expects multiple AI design wins over the next six months. With more wins, Cisco would have its gear in more AI systems.

The figure to watch is any AI order update in Cisco’s fiscal Q1 2027 report. If orders keep the pace of fiscal 2026, the $7.5 billion target would look low. But management said such orders are usually placed well ahead of time. If those orders slow, Cisco stock has less room to surprise on the upside.

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