Don't overlook the artificial intelligence potential of Cisco Systems , Citi said.
"While AI is currently a small piece of the biz (~2% of revs), we see the potential for a stronger contribution," he wrote.
At least three major hyperscalers have already begun using the company's tools in backend networks, and Malik views Cisco's recent $9 billion 2027 hyperscaler AI opportunity forecast as potentially understated.
"We believe shares warrant a sizable discount to networking peer valuation to reflect lingering share loss concerns, somewhat tempered by growing AI opportunities," he wrote.
"Even at a 30+% discounted target multiple to peer average, we see meaningful upside to shares."
Persons:
Atif Malik, Malik
Organizations:
Cisco Systems, Citi