11:09 AM EDT, 08/14/2025 (MT Newswires) -- Cisco Systems' ( CSCO ) fiscal Q4 upside was in line with investor expectations, while its fiscal 2026 outlook gives room for macroeconomic uncertainty, Morgan Stanley said in a note to clients Thursday.

Cisco's ( CSCO ) product orders growth of 7% in fiscal Q4 exceeded expectations of 5%, driven by stronger artificial intelligence demand, according to the note.

AI traction improved with roughly $800 million of AI webscale orders in the quarter, taking fiscal 2025 AI orders above $2 billion with about $1 billion recognized as revenue, Morgan Stanley said.

Offsets included softer public-sector demand, with orders down 6% year over year and 'disappointing' security segment growth of 9%, Morgan Stanley said.

Cisco ( CSCO ) kept its fiscal 2026 topline growth outlook at 5% keeping 'some room for macro uncertainty' while fiscal Q1 guidance implies about 6.5% growth, Morgan Stanley said.

Morgan Stanley maintained an overweight rating on the stock and raised its price target to $73 from $70.

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