Wells Fargo upgrades this tech stock after an earnings beat, sees strong AI momentum

Emerging artificial intelligence opportunities could push Cisco higher, according to Wells Fargo. Analyst Aaron Rakers upgraded the technology stock to overweight from equal weight. He also lifted his his price target to $75 from $72, signaling 22% upside. Rakers pointed to accelerating AI momentum and diversification for the company as one driver for his rating change. Exiting its fiscal third quarter, Cisco already managed to surpass its $1 billion cumulative order target for the fiscal year. With this, the company could continue to diversify into other AI opportunities, such as large-scale sovereign AI opportunities and long-term traditional enterprise adoption. "We also see Cisco as well-positioned for longer-term enterprise AI (hundreds of millions); NVIDIA alignment a differentiator," he wrote. "With this, we think investor sentiment will become increasingly positive on Cisco's internal Silicon One competitive positioning." Cisco's orders have also grown at a solid pace this year. Rakers believes that the company could return to a higher valuation once investors completely factor in this AI traction plus increasing confidence in returning to sustained growth. "With increasing confidence in a normalizing order growth recovery, we see Cisco as presenting a continued EPS upside + value rerate story," the analyst wrote. Rakers also highlighted its mature subscriptions base, now estimated at 56% of Cisco's total revenue and more than 40% of its total product revenue. He added that Cisco also has the ability "capitalize on a broadening enterprise campus/branch networking upgrade cycle." The upgrade comes after Cisco report fiscal third-quarter results that beat analyst expectations, sending shares higher by 4%. Year to date, the stock has climbed more than 3%. CSCO YTD mountain CSCO year to date Analysts are somewhat split on the stock. Of the 24 who cover Cisco, 13 rate it a buy or strong buy, according to LSEG. Another 11 have a hold rating on shares.

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Yahoo

10 hours ago

• Yahoo

Mondelez Stock Gains as Wells Fargo Upgrades Rating, Raises Price Target

Mondelez International (MDLZ) stock was one of the biggest gainers on the S&P 500 Friday after Wells Fargo upgraded its rating and lifted its price target on the snacks and candy giant. Wells Fargo analysts lifted their rating to "overweight" from "equal weight" and raised their price target to $78 from $68, saying the "bull case feels more tangible" for the Chips Ahoy!, Oreo, and Sour Patch Kids parent. "While the company is confronting historical inflation in 2025, 1) pricing execution has been strong, 2) inflation looks likely to temper in 2026, and we see a recovery of earnings ahead," the analysts wrote. Mondelez International shares were up more than 3% in recent trading to about $68.50. They have gained roughly 15% this year. Read the original article on Investopedia Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

Forbes

12 hours ago

• Forbes

Cisco Live 2025 Touts Cisco's Platform Advantages For Enterprise AI

Cisco president and chief product officer Jeetu Patel presents at Cisco Live 2025. At last week's Cisco Live in San Diego, CEO Chuck Robbins said that it would be the most important Cisco Live ever and announce more innovations than ever. Having attended a ton of these events and followed the company closely for many years, I can tell you that the show mostly fulfilled that promise. More than that, it reinforced Cisco's areas of strategic focus in infrastructure, the modern workplace and digital resiliency. It's clear that Cisco is working hard to leverage its platform advantages across networking, security, observability, compute and even silicon to support agentic AI workloads. This should help customers simplify operations while maintaining the highest levels of network security and AI safety. As I pointed out in my analysis of the Cisco Partner Summit held late in 2024, Cisco was very deliberate — perhaps a touch slow — in establishing its overarching AI strategy. By now, though, I'm impressed with how quickly the company has been moving to bring this strategy to fruition. Let's dig into the details of what Cisco is doing, and what it could still do better. (Note: Cisco is an advisory client of my firm, Moor Insights & Strategy.) Cisco's Strategic Imperatives, Per Robbins And Patel Early on, Robbins made the fundamental point that networking is critical for AI to function, and will be a big factor in enabling AI growth going forward. Beyond that, agentic AI will be adequately secured only by applying security to the network. In this context, Robbins scored a direct hit on Cisco's competitors when he pointed out that 'None of our network friends have security and none of our security friends have networking.' He believes (and I agree) that this puts Cisco in a unique position to help integrate security into the network, which I think is going to be especially important in enterprise IT. AI is growing like wildfire against a backdrop of global turmoil. Robbins said that geopolitical dynamics are a big concern for Cisco, noting that AI competition isn't just between companies, but between nations as well. Whether companies or countries, everyone has FOMO, and everyone feels like they need to move fast. (He said that 85% of enterprises believe they must 'do AI' in the next 18 months.) This reminds me that most of my conversations at this year's World Economic Forum in Davos were spent discussing countries' needs for a disconnected, sovereign AI cloud. The need is there. A new type of infrastructure will be required to realize the potential of generative and especially agentic AI. According to Robbins, we need a similar kind of advancement in infrastructure that happened when the internet became ubiquitous in the 1990s. It's worth pausing here to reflect on how important that period of technology was for turning Cisco into a networking juggernaut. Here in the 2020s, this is going to play out with a hybrid strategy that includes both cloud hyperscalers and private enterprise datacenters. For meeting this need, Robbins told the crowd not to underestimate the impact of Cisco's combined strengths in networking, security and silicon. (In my view, Cisco needs to talk more often and in more detail about the silicon part. I'll come back to that in my recommendations at the end of this article.) After the CEO's keynote was done, Cisco's chief product officer — and newly appointed president — Jeetu Patel took the stage and echoed Robbins with his emphasis on: He later gave much more detail on each of those facets, as I'll cover below. But first he talked about how the ability of AI agents to autonomously execute tasks will compound productivity, especially when combined with advances in robotics, AI and other areas. As he put it, '8 billion [people] will feel like 80 billion.' However, this productivity explosion will be constrained by limits in power, networking and compute. He also foresees a growing divide between companies that are dexterous with AI and those that will struggle. 'We want to help you be in that first category,' Patel said. He's making a very timely prediction. I presented to a group of European CIOs earlier this week in Munich, and one of the slides showed logos of companies that 'died' from not embracing the internet and e-commerce. The same will happen to companies that don't quickly embrace AI. You don't have to be first, but you can't be last. How can Cisco help? Patel brought it back to the compounding effect of Cisco's platform approach, where many different types of complementary technology work 'in harmony.' He referenced the company's silicon (so customers aren't stuck with a single provider) and especially programmable silicon (to adapt to new use cases). He also reiterated a point he had made in the 2024 Cisco Partner Summit — that AI is foundational to Cisco's products, so customers can expect it to be built right in. While I think that's an accurate thing to say, I would also suggest that by now it's not such a point of differentiation. The Need For AI-Ready Infrastructure Patel went into more detail about the massive, even exponential, buildout of datacenters underway right now. He said that Cisco is foundational in building out these new datacenters. For datacenters to support large-scale agentic AI, they need a new architecture that can support the constant high levels of AI model activity that agentic creates. This is unlike generative AI chatbots, where the activity spikes up and down. Patel believes that the company can take advantage of the opportunity based on the experience it has gained from many years of serving hyperscalers/CSPs, neoclouds and enterprise customers. In support of my praise for Cisco's impressive speed lately, Patel touted the 19 major datacenter innovations the company has launched just within the past six months. At Cisco Live, it announced the unified Nexus Dashboard, which creates 'one brain for all of our data center fabrics,' according to Patel. There was also plenty of talk about the company's partnership with AI bellwether Nvidia. Among other aspects of the pairing, Cisco switches are completely integrated into Nvidia architecture, and Nvidia NeMo models can be secured with Cisco AI Defense. As I have said before, I am a recovering product management and product marketing executive, and I always challenge tech companies to describe their product realization process. While Cisco gets criticized for its 'legacy' roots, Patel has very much changed the product culture there. Fewer layers and faster time-to-decision. Most of the new software underlying AI was developed by small teams with six to eight members. This is a new practice — and very much a new Cisco. I will be digging more into the metrics and outcomes as they're available, but I like what I hear so far. Given that this is Cisco we're talking about, that was just the tip of the iceberg for cybersecurity. Patel described security as a prerequisite for enterprise AI because 'If people don't trust the system, they're not going to use it.' There was also an announcement about the Hybrid Mesh Firewall, which enables distributed policy enforcement, adds security to all sorts of devices and can work with existing firewalls (even from third parties). There were other announcements of specific firewalls, and Patel asserted that Cisco is the price-performance leader for firewalls at every level of scale. The company also launched a new secure network architecture called Cisco Live Protect, which is meant to shield your network from an exploit within minutes to give your IT security team time to fix the underlying issue. The contrast between 'within minutes' and the industrywide 45-day average to patch a vulnerability is striking, to say the least. You can read more in this analysis from my colleague Will Townsend, who's an expert on networking and cybersecurity. Our colleague Matt Kimball, who has a long background in datacenters, will also be publishing his analysis soon. Networking And Equipping The Workplace Of Tomorrow This part of the presentation bridged various aspects of networking for enterprises, where Patel said the priorities were operational simplicity, scalability and — once again — security infused into the network. He got some cheers when he announced that Cisco's Catalyst switches are now unified with its Meraki network platform; there's now a single dashboard for managing these along with all of Cisco's next-gen devices. From my perspective, this is a nice example of Cisco's growing emphasis on easing the customer/user experience. In that vein, there was also an impressive demo of the new AgenticOps platform, which includes a multiplayer management console called AI Canvas. Will Townsend wrote much more about this in his article, praising its 'dynamic and real-time view into the inner workings of a customer's infrastructure expanse' to manage the network assurance, observability and remediation supplied by other Cisco tools. The live demo showed a user fetching data on a network outage and making UI widgets in real time to manage it. The engineer using it walked through troubleshooting, then inviting other users to help — with an autogenerated AI summary of what had been done so far. The AI model recognized missing data and looked for it, and then it was easy to apply a patch straight from the dashboard. Even a non-engineer like me could see immediately how helpful this console would be. Patel is not afraid to use hyperbole when it's warranted, so he summarized the impact of AgenticOps by saying, 'The way in which you run your network will never be the same again.' And he promised that much more innovation like this is coming through the pipeline. There was a lot more, including 'one of the largest refreshes of networking devices in Cisco history.' This includes smart switches, secure routers, WiFi 7 gear, campus gateways, industrial IoT . . . if you can network it, Cisco wants to do it smarter. For example, the new smart switches have isolated compute so you can run things like security right on the switch, plus all of the devices act as sensors that provide information about their environment back to the system. Harnessing Data And AI To Fortify Digital Resilience When the conversation turned to digital resilience, Patel and other presenters continued the theme of bringing more data into the picture to keep infrastructure running well. Enterprises routinely expend many hours determining the causes of outages; in Patel's view, the friction of this process is created by not having the right data available. 'One of the reasons we acquired Splunk for the low price of $28 billion,' he said, 'was to take all this data across multiple domains and correlate it.' He added that the core method of digital resilience is to distill data, correlate it, then unleash AI on the problem. There were plenty of specifics in terms of new launches, new Splunk integrations and so on, not to mention using smaller, more efficient bespoke AI models for specific security needs. (Those Cisco folks really are building AI into everything.) But for me there were two big takeaways from this part of the show. First is the idea of reimagining security operations by performing security at machine scale, and consolidating and simplifying security solutions to make that easier. Second is the extension of observability to AI. Some aspects of AI may still be 'black boxes' in terms of what the algorithms are doing, but Cisco wants to give its customers the ability to see everything their AIs are doing in terms of compute usage, network traffic, power draw and so on. If the company is able to pull off everything talked about onstage, I think that can only help with operationalizing AI to yield real business results for enterprises. Messaging All This AI Innovation Cisco Live reminds me a little bit of Google Cloud Next in terms of the sheer number of announcements packed into a couple of days. And it makes sense, given that both Cisco and Google Cloud (a) operate across multiple product areas with many different individual offerings in them, and (b) are investing enormous amounts of bandwidth (and capex) into AI — at speed. There are a couple of risks I see for Cisco. First, yes, the company's leaders told us repeatedly that AI is 'foundational' in their products. But it's one thing to claim this — as do most of the big infrastructure providers and enterprise software vendors. And the demos were great. But it's another thing to accurately engage with the market as a whole and with individual customers to help them understand the many potential payoffs for Cisco's AI innovations, area by area and product by product. I have great faith in Cisco's go-to-market prowess, but there's so much coming down the pike so fast that, to be most successful, the company needs to do the very best job of explaining its wares that it's ever done. Maybe it's my background in semiconductors talking, but I see this especially in how Cisco talks about its in-house silicon. In my view, Cisco doesn't blow this trumpet as loudly or as often as it should. The company announced its Silicon One initiative in 2019, and has been shipping its own chips for years by this point . . . yet there still aren't enough people who know about it. And look at the valuations of AI chip companies today. So I urge the company to talk more about its chips and how they add to the differentiation of Cisco's portfolio. The good news is, the introduction of all this AI functionality from Cisco — and the sea change underway in AI datacenter infrastructure — offers a perfect opportunity to do this. Cisco has some unique advantages in the market, starting with Chuck Robbins' correct and fundamental assertion that no one else in networking can match Cisco in security, and no one else in cybersecurity can match Cisco for networking. I'm also impressed by the waves of smart, relevant, user-friendly products I see at each Cisco event I attend. Now I want to see just how well Cisco can market, message and sell all this goodness into the enterprise.

Yahoo

13 hours ago

• Yahoo

Mondelez International bull case now 'feels more tangible'

-- Wells Fargo upgraded Mondelez (NASDAQ:MDLZ) International to Overweight with a $78 price target, citing improving fundamentals and a compelling risk-reward setup relative to its staples peers. 'This is not a cocoa call,' analysts said, emphasizing that the bull case is grounded in strong price execution, muted inflation expectations into 2026, and a favorable valuation backdrop. The firm highlighted three primary reasons for its positive stance. First, chocolate elasticities are holding up well despite record pricing. 'Europe chocolate elasticities are -0.25 YTD,' Wells Fargo wrote, better than Mondelez's assumed range of -0.4 to -0.5 and in line with historical norms. 'Anchoring this elasticity assumption in our model implies FY Europe org sales ~+12%,' the analysts added. Second, inflation pressures are expected to ease next year. 'MDLZ is showing it can price big if needed and hold the line on elasticities,' they noted. According to Wells Fargo's proprietary commodity model, 'commodities appear neutral to 2026,' increasing confidence in margin expansion. Finally, Wells Fargo sees Mondelez delivering 'algorithm EPS in 2026 (model +9% y/y),' with organic sales of +3% and gross margin expansion of 100bps, even while SG&A grows at +6%. Notably, the bank says 'MDLZ is currently 21x NTM P/E vs PG/KO 23x, CL 24x, HSY 29x, MNST 33x, despite EPS growth 2x (or more) vs this cohort.' 'A bull case is possible (and upside), but we don't think it's needed… this is a unique stock,' wrote Wells Fargo, adding that it is 'one that can grind.' Related articles Mondelez International bull case now 'feels more tangible' - Wells Fargo Reddit in talks to use Sam Altman's World ID for user verification - Semafor Regulators clear Canadian Natural's SLB acquisition after divestiture agreement Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data