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Melius sees the collaboration between Nvidia and Cisco as a significant opportunity for the company, stating it now has "a shot to be on the right side of AI in the enterprise."
Cisco Systems (CSCO) stock inched up 0.18% in pre-market trade on Wednesday after Melius Research analyst Ben Reitzes reaffirmed a ‘Buy’ rating with a $79 price target.
Reitzes pointed to three factors that could drive Cisco’s valuation higher in the coming months: its deepening AI collaboration with Nvidia (NVDA), an expected boost in networking orders from a major campus switch upgrade in late 2025, and the strengthening of its security strategy.
The analyst noted that Cisco’s growth story "may creep up on you quickly in CY25."
Cisco and Nvidia recently expanded their long-standing partnership to advance enterprise AI adoption and modernize data center networks.
The two companies are working on a unified cross-portfolio architecture to simplify AI-ready network deployment.
A key development includes integrating Cisco’s Silicon One chip into Nvidia’s Spectrum-X Ethernet platform, making Cisco the only third-party silicon provider supported within the Spectrum-X ecosystem.
Melius sees this collaboration as a significant opportunity for Cisco, stating the company now has "a shot to be on the right side of AI in the enterprise."
Melius also pointed to an anticipated increase in networking orders tied to a large-scale campus switch upgrade scheduled for the second half of 2025.
The brokerage expects this refresh cycle to provide a meaningful tailwind for Cisco’s core networking business, reinforcing its competitive position in the sector.
Cisco’s evolving security strategy is another factor Melius believes could support a higher valuation multiple. The firm noted that the company’s recent efforts in security are "finally taking hold.”
On Stocktwits, retail sentiment around Cisco’s stock climbed within the ‘bullish’ zone, accompanied by a drop in chatter levels.
Cisco shares have risen nearly 3% in 2025 and gained 23% over the past 12 months.
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Read also: Nvidia Stock Falls Pre-Market After Reports of US Tightening Trade Controls And Intensifying Lobbying Efforts — Retail Remains Cautiously Optimistic
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