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Cisco’s AI networking boom lifts shares, but valuation stays stretched
Cisco posted a 24.0% operating margin over the last 12 months and took $9.3 billion in AI infrastructure orders from hyperscalers in fiscal 2026.
Cisco’s stock has rallied on expectations that AI will drive a “networking super cycle,” but investors are increasingly weighing whether the price already reflects the upside. Yahoo Finance notes that the stock’s trend strength ranks in the top 8% of large U.S. companies, after about a 67% run over the past year.
The article links the momentum to fundamentals, highlighting an operating margin of 24.0% over the last 12 months, above the S&P 500 median of 18.4%. Revenue growth is also described as outpacing the broader market, at 9.2% versus an index median of 8.3%, with a three-year average operating margin of 24%.
Cisco’s AI-related demand is cited as a key driver, including $9.3 billion in orders for AI infrastructure for hyperscalers in fiscal 2026. In the most recent quarter, total product orders were up 35% year over year, suggesting demand extends beyond only the largest AI players.
Despite strong performance, the piece says the market is charging a premium. It points to a 37.3 price to earnings multiple versus a 23.3 S&P 500 median and a 7.3 price to sales multiple versus a 3.3 market median, alongside stock softness after the run-up, including a roughly 9% pullback from its one-month high and trading about 13% below its 52-week high of $130.37.
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