Buy Cisco Systems (CSCO) Stock for Higher Highs as Earnings Approach?

Among the tech sector, one stock investors may want to pay attention to this week is Cisco Systems CSCO, which is set to report its fiscal second-quarter results after market hours on Wednesday, February 12.While Cisco Systems may often be overlooked for some of the heavy hitters in Silicon Valley, the company’s products and services are critical to computer network security. From preventing unauthorized access to system resources, to blocking malware and viruses, Cisco Systems has a vital role in supporting and protecting enterprise networks.    Rapidly expanding its presence in the network security domain, Cisco Systems stock has risen a very respectable +24% in the last year and is hovering near 52-week highs of $63 a share.Image Source: Zacks Investment Research Cisco’s Q2 Expectations Based on Zacks estimates, Cisco Systems' Q2 sales are projected to be up 8% to $13.86 billion compared to $12.79 billion in the prior-year quarter. On the bottom line, Q2 EPS is expected to rise 4% to $0.91 versus $0.87 a share in the comparative period.More intriguing and astonishing is that Cisco Systems has consistently surpassed the Zacks EPS Consensus (quarterly) going back to 2012 and has exceeded sales estimates for 10 consecutive quarters. Over the last four quarters, Cisco Systems has posted an average EPS surprise of 4.14%.Image Source: Zacks Investment Research Full Year Outlook & FY26 Projections Cisco Systems' total sales are now expected to increase by nearly 4% in fiscal 2025 and FY26, with projections edging toward $60 billion. Annual earnings are currently slated to dip 2% this year but are projected to rebound and rise 7% in FY26 to $3.90 per share. Furthermore, FY26 EPS projections would reflect 30% growth over the last five years, with Cisco Systems' earnings at $3.00 a share in FY22.     Cisco’s Role in Artificial Intelligence Sustaining the momentum in CSCO shares and lifting Cisco Systems' outlook is its significant and sometimes underestimated role in the field of artificial intelligence. To that point, Cisco Systems offers a range of AI-powered solutions and services that help organizations leverage AI to improve efficiency, security, and overall performance.1. AI-Driven Infrastructure: Cisco provides the infrastructure needed to support and scale AI workloads, ensuring that organizations can handle the increasing demands of AI applications.2. AI-Powered Security: Cisco's AI solutions help secure the use of AI within organizations, protecting against threats and ensuring responsible AI practices.3. AI-Enhanced Products: Cisco offers AI-enhanced products that boost productivity and optimize digital experiences for users.4. AI in Networking: Cisco uses AI and machine learning (ML) to improve network management, troubleshooting, and security. This includes real-time problem detection and resolution, as well as predictive analytics to prevent issues before they occur. Bottom Line Ahead of its Q2 report, Cisco Systems stock sports a Zacks Rank #2 (Buy). Trading at a reasonable 17.2X forward P/E multiple, FY25 and FY26 earnings estimate revisions have remained higher for Cisco Systems in the last 60 days. This suggests higher highs could be in store for CSCO, especially if Cisco Systems can continue its impressive streak of surpassing quarterly expectations and offer favorable guidance.    Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cisco Systems, Inc. (CSCO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks