Cisco Systems stock downgraded before fiscal first-quarter results

Published on 11/06/2026 at 13:30 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Cisco Systems stock faces a Morgan Stanley downgrade before fiscal first-quarter results. The bank sees less upside after a strong rally.

Analyst caution ahead of results

Morgan Stanley lowered Cisco's rating after a strong 12-month share-price run.
The bank cited valuation, possible order pull-forward and AI-related gross-margin pressure.
Cisco's fiscal first-quarter results are due after the market close on November 12.

Cisco Systems Inc., US17275R1023, Illustration mit AI erstellt.

Morgan Stanley downgraded Cisco Systems to Equal-weight from Overweight on Thursday, November 5, and cut its price target to 120 US dollars from 135 US dollars. The move came before Cisco's fiscal first-quarter results, with the bank arguing that the shares now offer a more balanced risk-reward profile.

Cisco Systems stock traded at 86.48 euros on Lang & Schwarz at 13:18 CET on Friday, November 6, 2026.

The downgrade was reported by Investing.com. Analyst Meta Marshall said Cisco's improving demand environment and artificial-intelligence opportunity still support the long-term investment case, but much of the rerating is already reflected in the shares.

Valuation and margin risks

Morgan Stanley said Cisco has gained 43 percent over the past 12 months, compared with a 14 percent rise for the S&P 500. The stock has consequently rerated to about 19 times forward earnings, bringing its valuation in line with the broader index.

The bank also pointed to two operating risks. Customers may have brought orders forward ahead of planned price increases, which could flatter near-term sales. At the same time, a larger share of lower-margin hardware sold to hyperscale customers could weigh on gross margins as Cisco expands its AI infrastructure business.

Marshall nevertheless expects Cisco to continue benefiting from earnings growth and sees several years of double-digit growth, particularly through cloud customers. Morgan Stanley said the growth mix will rely increasingly on AI revenue once the company moves beyond the effect of its pricing increases in fiscal 2028.

Results set the next test

Cisco is scheduled to report its fiscal first-quarter results after the US market close on Thursday, November 12. Investors will focus on whether demand remains firm after pricing changes and whether the developing AI mix is putting pressure on profitability.

US technology shares remain the broader market backdrop for Cisco stock; see current market reports.

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