11:05 AM EDT, 08/13/2026 (MT Newswires) -- Cisco Systems ( CSCO ) is benefiting from broad-based strength across its core enterprise business and hyperscaler AI infrastructure, with improved supply availability helping drive market-share gains and stronger growth, Morgan Stanley said Thursday in a report.

Cisco's ( CSCO ) core business, excluding hyperscalers, is expected to grow 10% in fiscal 2027, while hyperscaler AI revenue is projected to reach $7.5 billion, almost 90% higher from a year earlier, Morgan Stanley said. Overall full-year revenue growth is estimated at 15%, the report said.

Demand remains strong as enterprises and hyperscalers invest in networking and security equipment to support AI workloads, while Cisco's ( CSCO ) security business also improved, the report said.

Faster hardware growth and higher memory costs are expected to keep gross margins under pressure through much of fiscal 2027, though lower operating-expense "intensity" and stronger operating leverage may offset some of that pressure, the report said.

Morgan Stanley raised full-year estimates to EPS of $5.09 on revenue of $72.8 billion from EPS of $4.78 on revenue of $68 billion.

Morgan Stanley raised its price target on Cisco ( CSCO ) stock to $135 from $130 and maintained its overweight rating.

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