Prediction: This Forgotten Tech Stock Could Make a Comeback by 2028

Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) spent years as the networking giant that growth investors passed over. AI is pulling it back into the public eye.

The 24/7 Wall St. price target for Cisco is $125.51, which implies 16.87% upside from $107.39. The model is highly confident in its buy rating for the stock.

The comeback case rests on AI infrastructure revenue. Cisco expects AI infrastructure revenue to reach $7.5 billion in FY2027, up from about $4 billion in FY2026. If that ramp holds, our model’s base case reaches $138.03 by October 2028.

Cisco is one of the names gaining as hyperscalers pour money into the picks-and-shovels side of AI (we featured seven of these non-chipmaker suppliers in a free report you can grab here).

A Sharp Weekly Pullback Follows a Strong 2026 Rally

Shares fell 9.29% over the past week and are about flat over one month (+0.05%). They are still up 41.96% year to date. The stock sits about 17% below its 52-week high of $129.38 and about 57% above its low of $68.58.

Fiscal Q4 revenue rose 17.58% to $17.25 billion, ahead of the $16.83 billion estimate. Non-GAAP EPS of $1.22 exceeded expectations of $1.17. Even so, the stock slipped after the report on margin concerns, and Piper Sandler cut its price target in September.

Why Bulls See $136 and Beyond

Management guides FY2027 revenue to $72.2 billion to $73.4 billion and non-GAAP EPS to $5.05 to $5.11. Q4 product orders rose 35%, and Cisco won three new hyperscaler design wins. Hyperscaler AI grew to about 6% of total revenue, up from under 2%.

Chuck Robbins said, “We believe we’re only at the beginning of this super cycle.” The consensus target is $136.16, supported by 19 bullish ratings and no sells. Our bull case is $136.52.

Margin Pressure and Hyperscaler Dependence Could Stall the Comeback

Non-GAAP gross margin slipped to 66.3% from 68.4% as hardware became a bigger share of sales. Price increases added about five points to Q4 growth, and FY2026 operating cash flow fell 0.11%. Restructuring charges continue through FY2027.

CFO Mark Patterson pushed back on the margin worry: lower-margin hardware “actually turns out to be highly profitable because we don’t have to add incremental expenses.” Our bear case is $106.37.

Cisco Trades at Half Arista’s Multiple

Arista Networks (NYSE:ANET) competes directly with Cisco for AI data center switching. Revenue grew 37.7% last quarter, which helps explain why the stock trades at a forward P/E of 39, about twice Cisco’s.

Hewlett Packard Enterprise (NYSE:HPE) now has Juniper Networks and posted 74.9% networking growth. However, its 4.8% operating margin is far below Cisco’s. With HPE at the low end and Arista at the high end, Cisco’s valuation looks reasonable, and our target leaves room for upside.

Cisco Earns a Buy Rating at These Levels

The 24/7 Wall St. price target of $125.51 carries a buy rating with 90% confidence. The forward valuation supports the rating: about 20 times earnings for a business that expects earnings growth to speed up in FY2027.

The bull case strengthens if hyperscaler orders keep turning into revenue on schedule. The case weakens if gross margin falls below the 65% low end of guidance. On balance, I think the comeback is real.

These longer-range figures extend the model’s base case:

These projections assume Cisco keeps executing on Silicon One and its optics strategy. A slowdown in hyperscaler spending or new tariff pressure could pull results well below this path.

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