How Cisco’s New Sovereign Secure AI Factory Could Reshape the Cisco Systems (CSCO) Investment Narrative

• Cisco, SharonAI Holdings and NVIDIA recently launched Australia’s first Cisco Secure AI Factory, a sovereign AI infrastructure platform powered by 1,024 NVIDIA Blackwell Ultra GPUs, Cisco UCS servers, Nexus Hyperfabric and VAST Data storage to keep all AI data and processing within the country.
• This AI-focused build-out, alongside Cisco’s expanded AI-enabled partnerships with firms such as HCLTech and TCS, reinforces its ambition to sit at the core of secure, large-scale enterprise AI deployments.
• We’ll now examine how this new sovereign Cisco Secure AI Factory, combined with recent AI partnerships, may influence Cisco’s investment narrative.

Find 53 companies with promising cash flow potential yet trading below their fair value.

Cisco Systems Investment Narrative Recap

To own Cisco, you need to believe it can stay central to global networking and security while converting AI demand into durable, recurring revenue. The new Cisco Secure AI Factory in Australia supports the AI infrastructure and sovereign cloud story, but it does not change the key near term swing factors: execution on higher margin software and security, and exposure to large, potentially volatile AI infrastructure orders from a concentrated customer base.

Among recent announcements, Cisco’s Q2 FY2026 results and raised full year guidance stand out as most relevant here. They show how AI focused networking demand and product mix are already feeding into revenue and earnings, offering a financial backdrop against which to judge whether initiatives like the Secure AI Factory can help offset pressures such as rising memory costs and intense competition in high performance networking.

Yet while AI infrastructure orders are a clear support today, investors should also be aware that Cisco’s growing reliance on a small set of hyperscale AI customers introduces...

Read the full narrative on Cisco Systems (it's free!)

Cisco Systems' narrative projects $65.2 billion revenue and $14.0 billion earnings by 2028. This requires 4.8% yearly revenue growth and about a $3.8 billion earnings increase from $10.2 billion today.

Uncover how Cisco Systems' forecasts yield a $88.81 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Twelve Simply Wall St Community fair value estimates for Cisco span roughly US$60.75 to US$88.81 per share, reflecting a wide range of conviction levels. Against this, Cisco’s push into large scale AI infrastructure, including the new sovereign AI Factory in Australia, raises important questions about how much dependence on a few hyperscale buyers might influence long term performance, so it is worth weighing several viewpoints before forming a view.

Explore 12 other fair value estimates on Cisco Systems - why the stock might be worth as much as 12% more than the current price!

Form Your Own Verdict

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Cisco Systems research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Cisco Systems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cisco Systems' overall financial health at a glance.

Ready To Venture Into Other Investment Styles?

Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay:

• Outshine the giants: these 23 early-stage AI stocks could fund your retirement.
• Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 31 best rare earth metal stocks of the very few that mine this essential strategic resource.
• AI is about to change healthcare. These 30 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com