Cisco Shares Drop 4.5% Despite AI Order Surge and Raised Price Target

Cisco Systems (NASDAQ: CSCO) fell sharply by 4.5% on Friday, closing at $113.77 despite reporting accelerating AI demand and receiving an upgraded price target from KeyBanc. The decline erased approximately $21 billion from Cisco's market capitalization as investors questioned whether current valuations already reflect the company's AI growth potential.

KeyBanc raised its price target to $130, suggesting 14% upside from current levels. Cisco also increased its fiscal 2026 AI orders outlook to $9 billion from $5 billion, signaling strong momentum in AI infrastructure demand. Trading volume surged to 50.1 million shares, nearly double the daily average.

Market skepticism persists around whether Cisco's traditional networking business can fully capitalize on the AI boom. The stock's reaction highlights the tension between near-term valuation concerns and long-term AI-driven growth narratives in tech equities.