摩根士丹利称思科进入更持久增长阶段，但新增预期差不足以交易

Following several meetings with Cisco (CSCO) executives, Morgan Stanley believes the Chuck Robbins-led tech giant is entering a “more durable growth phase.”
Roughly 7% of the Catalyst 4K and 6K installed base has been refreshed so far, “leaving the cycle in very early innings,” Morgan Stanley analyst Meta Marshall wrote in a note to clients. Catalyst 4K is at the end of its life cycle by the end of the year, while Catalyst 6K hits the end of its life cycle by the end of 2027.
“Wireless access points also need to refresh, while customers on the first generation of Cat 9K may increasingly upgrade to newer platforms,” Marshall added. “[Investor relations] also pointed to software activation data for Meraki hardware that has already shipped, where non-activation rates are at a five-year low, suggesting customers are installing and activating equipment quickly rather than allowing it to sit in channel or customer inventory.”
Marshall has an Overweight rating and a $135 price target on Cisco.
Delving deeper, Marshall said Cisco's supply chain is still tight, but its ability to procure supply is a “competitive advantage,” thanks to its balance sheet, its large purchase commitments, and its direct relationship with Taiwan Semiconductor (TSM).
“Volumes with TSMC are expected to increase ~10x in FY27 across 3nm, 5nm, and 7nm, with 3nm remaining the tightest node,” Marshall added. “Near-term 3nm exposure is limited to CSCO’s G300 chip, which has yet to enter production, though management indicated line of sight into a near-term design win. [Investor relations] also noted that CSCO provides TSMC with additional customer diversification, creating a strong incentive for both sides to deepen the relationship.”
Other notable takeaways from the meeting include that although gross margins are under pressure now, there should be some tailwinds as fiscal 2027 rolls on, Marshall noted. A gross margin level of roughly 64% is viewed as a “reasonable baseline,” though current guidance does not include any kind of pricing upside.
“Management also emphasized that it does not intend to pursue growth through structurally lower-margin business,” Marshall added. “Mixing in Silicon One into campus switching portfolio should add a margin tailwind in future periods, even if hardware mix remains high.”
Lastly, the company's security business is an “underappreciated source of upside as networking modernization broadens,” Marshall added.
“Refreshed firewalls and Hypershield are seeing healthy demand, while CSCO is simplifying the portfolio by retiring legacy offerings and concentrating investment behind newer platforms,” Marshall noted.