Tae Kim

Nvidia and Advanced Micro Devices receive most of the attention as the obvious infrastructure hardware suppliers for artificial intelligence, but investors shouldn't overlook Cisco Systems, Melius Research says.

On Monday, analyst Ben Reitzes reiterated his Buy rating for Cisco stock and reaffirmed his $78 price target.

Cisco is the "sovereign AI player no one is talking about," he wrote. "Cisco is one of the cheapest stocks in our coverage universe and seems to be getting on the right side of AI."

In early trading Monday, Cisco stock rose by 0.4% to $63.32.

The analyst cited Cisco's sovereign AI deals announced last month with Saudi Arabia and the United Arab Emirates. Cisco plans to help both countries build secure, cloud-based AI infrastructure with its hardware and partners.

"Given sovereign demand and a campus [networking hardware] switching refresh, product orders can really pick up over the next year or two," he wrote.

Last month, Cisco reported better-than-expected fiscal-third-quarter earnings, and gave a solid revenue outlook for the current quarter.

Cisco stock is up 7% this year, versus a 1% drop for the Nasdaq Composite index.

Despite some progress in recent years, Cisco's stock price remains roughly 20% off the all-time high achieved in early 2000.

Write to Tae Kim at tae.kim@barrons.com

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June 02, 2025 12:15 ET (16:15 GMT)

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