Cisco Systems (CSCO) is expected to deliver revenue and EPS upside in Q4 following industry checks and commentary from hyperscalers and neoclouds, UBS said in a report Monday.

The checks point to demand for AI infrastructure accelerated over the past 3-months, supporting strong Networking revenue and Product' orders in the quarter, the report said.

UBS analysts forecast adjusted EPS of $1.16 on revenue of $16.77 billion for the quarter, slightly below market consensus.

The note said Networking revenue growth could accelerate from last quarter, while Product order growth could decelerate.

However, strength in scale-across pluggables and systems following more than $1 billion in Acacia orders last quarter could be a source of upside to UBS order estimate.

"While the revenue bias is to the upside, persistently high

component costs will likely cap Cisco's gross margin around 66% resulting in potential EPS upside," the report said.

UBS maintained its buy rating with a $132 price target.

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