Cisco Systems CSCO shares are trading at a premium, as suggested by the Value Score of D. In terms of the forward 12-month price/sales, CSCO is trading at a premium of 4.3X, higher than the Zacks Computer Networks industry’s 4.11X.

Cisco shares are trading at a premium compared to its closest industry peers, including Extreme Networks EXTR and NETGEAR NTGR. In terms of the forward 12-month P/S, Extreme Networks shares are trading at 1.75X, while NETGEAR is trading at 1.23X.

Price/Sales Ratio (F12M)

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In terms of share price movement, Cisco shares have appreciated 13.6% in the past month, underperforming the industry’s and the Zacks Computer & Technology sector’s return of 14.3% and 15.5%, respectively. Cisco shares have underperformed NETGEAR and Extreme Networks in the past month, shares of which have surged 36.2% and 34.5%, respectively, over the same timeframe. Cisco shares suffered from a challenging macroeconomic condition.

CSCO Stock’s Performance

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However, Cisco’s aggressive AI push and growing security dominance, as reflected by the recently concluded third quarter of fiscal 2025 results, are noteworthy. Security revenues jumped 54% year over year, while Networking increased 8%.

Can Growing Orders Boost CSCO’s Prospects?

In third-quarter fiscal 2025, total product orders grew 20% year over year or 9% on an organic basis. Networking product orders grew double-digits, driven by web-scale infrastructure, enterprise routing, switching and industrial IoT products. Campus switching orders grew in the high single digits in the reported quarter. WiFi 7 orders increased triple-digit on a sequential basis.

The company has expanded its portfolio by unveiling AI factory architecture developed in collaboration with NVIDIA NVDA. This is expected to drive up Cisco’s AI-driven revenues. Cisco had AI infrastructure orders worth more than $600 million in the third quarter of fiscal 2025, surpassing Cisco’s $1 billion annual target a quarter ahead of schedule.

Cisco’s expanded partnership with NVIDIA, under which the companies plan to offer solutions that help build AI-ready data center networks, is a game changer. Cisco Secure AI Factory with NVIDIA is founded on the NVIDIA Spectrum-X Ethernet networking platform. Security is at the core of the solution and helps enterprises simplify, deploy, manage and secure AI infrastructure at any scale. The launch of 800-gig Nexus switches based on Cisco’s 51.2 terabit Silicon One chip in April is expected to drive orders from AI-based cloud customers.