# Cisco rose by 35%, can we still chase it?

Cisco ( CSCO )'s stock price rose by 35% over the past year, mainly supported by two pillars: first, a surge in AI infrastructure orders, and second, the increasing demand for security services. It significantly outperformed peers like HPE (which even saw a decline) and Arista Networks (which only rose by 29%).

**AI has made a profit this time**: Last year, orders for AI infrastructure reached $2 billion, doubling expectations. In Q1 of this year, orders from hyperscale cloud vendors grew by 45%, with $1.3 billion coming from AI infrastructure alone. Cisco expects to generate $3 billion in AI infrastructure revenue from hyperscale customers this year. Additionally, sectors like industrial IoT and campus networks are also experiencing double-digit growth, with networking product orders showing high single-digit growth for five consecutive quarters.

**New products have also been launched**: In October, the 8223 routing system and P200 chip were released, and efforts are being made to enhance the AI assistant capabilities of Webex and customer experience tools. The collaboration with NVIDIA is also heating up, with the Nexus switch + Spectrum-X architecture providing low-latency high-speed connections for AI clusters.

**But there are pitfalls here**: The stock price valuation is already very tight—forward PS is 5.01 times, far higher than the industry average of 4.56 times, while HPE is only 0.68 times. Competitive pressure is also significant, and short-term risks are not small.

**Conclusion**: Cisco's story in the AI and security fields is indeed good, but the current price is not cheap. Zacks gives it a "hold" rating and suggests waiting for a better entry point.