Cisco (CSCO) Stock Just Hit a Record High Amid Layoffs Announcement

Cisco Systems (CSCO) stock climbed to an all-time high on May 14 after posting stellar Q3 results and announcing layoffs affecting nearly 4,000 roles worldwide. 

This represents just under 5% of the company’s global workforce, with management reassuring that these cuts are not at all borne out of financial distress. 

Cisco stock has been a rather lucrative investment in 2026, currently up more than 30% versus the start of this year. 

What Makes These Layoffs Bullish for Cisco Stock

CSCO shares are extending gains on Thursday, mostly because investors are reading the company’s decision to cut nearly 4,000 jobs as a strategic attempt to boost efficiency. 

According to management, these layoffs are aimed at reallocating resources toward higher-growth priorities such as AI infrastructure, silicon, security, and optical networking. 

These are all areas that drove Cisco’s blockbuster performance in its financial third quarter. 

By trimming lower-return segments and tightening operating expenses, the San Jose-headquartered firm is positioning itself for margin expansion and operating leverage just as demand for AI-driven networking ramps. 

Note that Cisco Systems currently sits firmly above its major moving averages (MAs), which reinforces that bulls are in control across multiple timeframes. 

Morgan Stanley Says CSCO Shares Are Still Cheap

Morgan Stanley analysts led by Meta Marshall view Cisco shares as “cheap” at about 29x forward earnings, given the company’s evolution from a legacy tech name into an AI-centric infrastructure provider. 

According to him, CSCO remains worth owning at current levels as its “multiple relative to other AI capex names is still reasonable, growth higher than in 15 years, and estimates still likely have room for upside.”

In his research note dated May 14, Marshall maintained his “Overweight” rating on Cisco Systems and raised the price target to $120, signaling potential upside of more than 4% from here. 

The Morgan Stanley analyst also cited a healthy 1.46% dividend yield for his bullish view on Cisco.

Cisco Remains Buy-Rated Among Wall Street Firms

Heading into the Q3 print, Wall Street had a consensus “Moderate Buy” rating on CSCO stock with the mean price target of roughly $89 only. 

However, it’s fair to assume that others will follow Marshall’s lead and upwardly revise estimates for Cisco Systems in the days ahead.