Cleveland Research upgraded Cisco Systems (NASDAQ: CSCO) from Neutral to Buy on May 9, 2025, signaling renewed optimism around the company’s ability to capitalize on emerging technology trends. The upgrade is anchored in Cisco’s improving demand trends, highlighted by a 29% year-over-year increase in product orders during the January quarter—the fourth consecutive quarter of accelerating growth. This upward trend has been buoyed by the integration of Splunk, which has strengthened Cisco’s data analytics and cybersecurity offerings.
AI momentum is another major catalyst. Cisco reported over \$350 million in AI-related orders in the latest quarter, pushing its total AI-driven sales to \$700 million in just six months. The infrastructure buildout for artificial intelligence, especially in enterprise environments, is translating into meaningful top-line contributions.
Financially, Cisco delivered strong second-quarter results, with revenue climbing 9% year-over-year to \$14 billion and adjusted EPS coming in at \$0.94—beating Wall Street expectations. The company raised its full-year revenue forecast to a range of \$56 billion to \$56.5 billion, reinforcing confidence in its near-term outlook.
💰 Dividend Fundamentals: A Pillar of Stability
Cisco continues to reward shareholders through steady and rising dividend payments. It recently announced a 3% increase in its quarterly dividend to \$0.41 per share, resulting in an annual payout of \$1.64 and a forward yield of about 2.76%. The payout ratio sits at a manageable 44.44%, suggesting room for continued increases.
Importantly, Cisco has increased its dividend for 13 consecutive years, making it a dependable choice for income-focused investors. This consistency, paired with a strong balance sheet and cash flow generation, underscores its reliability as a dividend stock.
📈 Investment Implications
With its foothold in AI and cybersecurity expanding, and strong execution translating into earnings beats and dividend growth, Cisco is emerging as a compelling blend of innovation and stability. Cleveland Research’s upgrade reflects the market’s recognition of these strengths, and investors looking for both growth potential and income consistency should keep a close eye on CSCO.