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This article first appeared on GuruFocus. Bank of America is reiterating its Buy rating on Nvidia (NASDAQ:NVDA) with a $350 price objective, arguing that the biggest catalyst around fiscal second-quarter earnings may not be another beat-and-raise quarter at all. Instead, analyst Vivek Arya says investors should focus on Nvidia's off-balance-sheet commitments and whether the company starts returning a much larger share of its rapidly expanding free cash flow to shareholders. Warning! GuruFocus has detected 4 Warning Signs with NVDA. Is NVDA fairly valued? Test your thesis with our free DCF calculator. Nvidia is expected to deliver its familiar 3% to 4% sales beat-and-raise as the Vera Rubin ramp accelerates. Bank of America believes that outcome is largely priced in. The bigger debate is Nvidia's growing financial commitments across the AI ecosystem. The firm estimates roughly $300 billion of committed capital to date, including about $70 billion of direct equity investments and $230 billion of guarantees or backstops. Including purchase commitments and cloud agreements, Bank of America puts the worst-case burden near $500 billion. That sounds enormous, but the bank argues the market may be overreacting. Nvidia's forward EV/EBITDA multiple has fallen roughly 44% from about 27 times to 15 times, while the estimated worst-case commitment burden equals only about 10% of enterprise value. Bank of America also expects Nvidia to generate roughly $470 billion of free cash flow across calendar 2026 and 2027, making the commitments more manageable than the headline numbers imply. Arya sees another overlooked catalyst in capital returns. Nvidia's expected free-cash-flow payout ratio of about 37% looks modest compared with Apple's historical playbook. Apple returned 82% of free cash flow from fiscal 2013 through 2025 and retired roughly 43% of its shares. Bank of America believes Nvidia could eventually lift its payout toward 50% to 75%. The earnings beat may matter less than what Nvidia says about financial obligations and buybacks. Better disclosure could reduce fears that Nvidia is overfunding the AI boom, while a larger capital-return program could provide valuation support. Investors should also watch whether growth broadens beyond hyperscalers into enterprise, sovereign and industrial AI customers. Bank of America sees Nvidia generating nearly $1 billion of free cash flow per day by next year, giving it room to fund ecosystem commitments and still return substantially more cash to shareholders.

According to him, Nvidia’s ecosystem financing strategy is both “offensive and defensive.” Arya added that Nvidia’s AI financing risks are overstated relative to its earnings growth. Stocktwits retail investors are betting on a strong NVDA post-earnings rally. Nvidia (NVDA) shares fell in morning trade, as the company heads into its second-quarter earnings report, with investors focused on more than just revenue and earnings per share.In an interview with CNBC, Bank of America (BofA) analyst Vivek Arya stated that the company’s balance sheet, cash generation and ability to support the broader AI ecosystem could be more important to the stock’s next move. “From a fundamental perspective, it's checking every box,” the analyst said. Arya also flagged the scale of Nvidia’s cash generation, saying the company could generate $1 billion in free cash flow every weekday by this time next year. “There is no other company on the planet that has managed to do that,” he said. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox NVDA stock fell over 1% in morning trade and was among the top trending tickers on Stocktwits at the time of writing. Retail sentiment around the Jensen Huang-led enterprise trended in ‘bullish’ territory over the past day, accompanied by ‘high’ levels of chatter. The shares have closed in the red in seven of the past eight trading sessions, according to Koyfin data. So far this year, NVDA stock has gained around 12%. The comments come amid renewed scrutiny of Nvidia’s investments and financing arrangements involving AI companies and cloud providers. Arya compared current concerns with the vendor financing that became controversial during the telecom boom and bust, but said the underlying economics are different today. “Ultimately, it's the durability of demand,” he said, pointing to utilization rates across AI infrastructure. “Right now, the utilization is over 100%. Every top customer has said that they don't have enough supply, so I think the cycles are fundamentally different.” The analyst added that Nvidia’s support for smaller, non-investment-grade neocloud companies could be both offensive and defensive. “Offensive because you're funding disruptors, you're creating a faster acceleration of adoption in the AI cycle, you're extending the durability,” he said. “It's also defensive because you're promoting an ecosystem that will be more reliant on your core infrastructure as opposed to going and doing a lot of custom chips.” Arya stated that Nvidia is trading at a discount relative to its earnings growth and that the company could increasingly become an important buyer of its own shares. According to an ongoing poll on Stocktwits, most retail investors expect NVDA stock to rally post-earnings.  Only 30% expect the stock to fall, with 16% anticipating a dip of over 5%. One retail trader said that NVDA’s weak price performance prior to earnings could be a setup for a post-earnings spike. Wall Street expects Nvidia to report second-quarter (Q2) revenue of about $92 billion and adjusted earnings of $2.07 per share, according to Koyfin data. Analysts also expect adjusted gross margins of around 75%, roughly unchanged from the prior quarter, and free cash flow of about $47 billion. Investors anticipate that Nvidia will market estimates on both revenue and earnings. Read also: MSTR Stock Price Target Slashed By $100, Bernstein Pushes Bitcoin $150K Forecast To 2027 For updates and corrections, email newsroom[at]stocktwits[dot]com. Prabhjote Gill has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: ANF Stock Is On Fire After ‘Strong Q2’ — Why Jefferies Still Sees 18% More Upside ANF Stock Is On Fire After ‘Strong Q2’ — Why Jefferies Still Sees 18% More Upside AFRM Stock Rises Overnight Ahead Of Earnings: This Analyst Expects A 27% Growth In GMV

Bank of America and JPMorgan downgraded the stock, citing slowing growth and expanding AI "disruption risks." Barclays flagged "unsatisfying growth" at the lower end of Intuit’s customer base, which could affect future upselling. Stifel and Piper Sandler raised their price targets despite maintaining ‘Hold’ and ‘Underweight’ ratings, respectively. Intuit (INTU) shares plunged in pre-market trading on Wednesday after the company’s fourth-quarter results left Wall Street divided, with some analysts issuing downgrades while others raised price targets. Some warned of “unsatisfying growth” and AI disruption risks while others said the company’s “foundations take time.” Intuit beat Wall Street's earnings and revenue expectations for the fifth consecutive quarter, posting adjusted earnings per share (EPS) of $4.03 and crossing $20 billion in annual revenue for the first time. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox However, the company's fiscal 2027 guidance called for total revenue growth of between 9% to 10%, a sharp deceleration from the 14% pace it posted in fiscal 2026. CEO Sasan Goodarzi acknowledged on the earnings call that Intuit "lost quality DIY customers to low-cost providers this year" due to TurboTax pricing friction, with TurboTax unit growth guided at just 2-3% for the year ahead. INTU stock dropped as much as 12% in pre-market trade and was among the top trending tickers on Stocktwits at the time of writing. Retail sentiment around financial technology company rose to ‘extremely bullish’ from ‘neutral’ territory, and chatter jumped to ‘extremely high’ from ‘high’ levels. In a note to investors cited by TheFly, Bank of America (BofA) analyst Tal Liani downgraded Intuit to ‘Neutral’ from ‘Buy’ with a price target of $360, down from $400. Meanwhile, JPMorgan downgraded Intuit to ‘Neutral’ from ‘Overweight’ with a price target of $331, down from $605, following the fiscal Q4 report. Both firms called that the company's AI "disruption risks" are extending beyond TurboTax to the QuickBooks business. They also flagged that Intuit is seeing a lower pace of new customer additions across QuickBooks. JPMorgan said Intuit's valuation multiple is likely to stay under pressure until investors "get more comfort around execution to mitigate disruptions," while BofA said the weak fiscal 2027 guidance reflects trends that "appear to be contrary to investors' expectations." Morgan Stanley lowered its price target on Intuit to $315 from $335 while maintaining an ‘Equal Weight’ rating. The firm called Intuit's fiscal 2026 results "solid" but said the fiscal 2027 guidance came in below expectations, adding that the "burden of proof remains high" as investors wait for confirmation that fiscal 2027 marks the growth trough rather than the start of a longer slide. Wells Fargo also lowered its target to $300 from $360 and kept an ‘Equal Weight’ rating. The firm said the quarter left investors with "more to chew on," pointing to initial fiscal 2027 TurboTax growth guidance of roughly 2% to 3%. Barclays cut its target to $408 from $443 but maintained an ‘Overweight’ rating. The firm said the company appears to be facing similar issues across its two main business segments, with "unsatisfying growth" at the lower end creating problems for future upselling. Stifel raised its price target to $300 from $275 while keeping a ‘Hold’ rating. The firm said Intuit had reset expectations with fiscal 2027 guidance below consensus and lower three-year growth targets, adding that "foundations take time." Piper Sandler raised its target to $290 from $250 but maintained an ‘Underweight’ rating. The firm said Intuit delivered good fourth-quarter results, but the initial fiscal 2027 revenue growth midpoint of 9.1% was below its 11.1% consensus estimate. INTU stock has fallen over 45% this year. Investors have been largely concerned about how generative AI tools might erode the value of software products like TurboTax and QuickBooks that have historically relied on complexity and expert assistance to justify their pricing. Goodarzi has pushed back on that framing directly, telling analysts on the earnings call that "AI will be a disruptor, and we intend to be the disruptor," pointing to Intuit's "Big Bets" initiatives, which grew 34% in fiscal 2026 and now account for 30% of total revenue. Read also: Trump’s ‘Economic D-Day’ Has A China Problem – And Paul Krugman Says It Could Keep Iran Sanctions From Working For updates and corrections, email newsroom[at]stocktwits[dot]com. Prabhjote Gill has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: Michael Burry Buys NVDA Calls As A ‘Hedge,’ Adds To ORCL, PLTR, NBIS Shorts — Why He Thinks ‘Nvidia Will Not Distribute Enough To Shareholders’ Anthropic Ramps Up Infrastructure Spending Ahead Of IPO, Says Report — Plans $45B Computing Push Anthropic Ramps Up Infrastructure Spending Ahead Of IPO, Says Report — Plans $45B Computing Push

Nvidia NVDA will step back into the earnings spotlight after the market closes on Wednesday, August 26, when the AI chip leader reports its much-anticipated Q2 results. Expectations are understandably elevated, but the setup looks increasingly interesting as Nvidia’s valuation has compressed despite extraordinary earnings growth. Beyond another potential top-and-bottom-line beat, Wall Street will be focused on the Vera Rubin product ramp, gross margins, and Nvidia’s growing role in financing the massive buildout of AI infrastructure. Investors are certainly wondering if NVDA can gain momentum with shares up a somewhat subpar 12% year to date despite sitting on enormous gains of +800% in the last five years. Image Source: Zacks Investment Research The Zacks Consensus Estimate calls for Nvidia to post Q2 revenue of $91.85 billion, representing a whopping 96% increase from $46.74 billion in the year-ago period. Adjusted earnings are projected at $2.09 per share, up 99% year over year. Those projections are essentially in line with Nvidia's own guidance for $91 billion in revenue, plus or minus 2%, which notably assumes no Data Center compute revenue from China. Data Center sales remain the primary growth engine, with the Zacks Consensus calling for roughly $85.14 billion, or 107% YoY growth. Perhaps more important than the headline Q2 numbers will be Nvidia's commentary surrounding its next-generation Vera Rubin platform, the company’s latest rack-scale AI supercomputer architecture designed to power the next era of agentic AI — systems that can reason, plan, and execute multi-step workflows at massive scale. Nvidia announced in May that Vera Rubin was ramping into full production, with production shipments slated to begin this fall. More recently, the company said Rubin-based racks are already running at partners including CoreWeave CRWV), Alphabet’s GOOGL) Google Cloud, Microsoft’s MSFT) Azure, Oracle ORCL) Cloud Infrastructure, and Nebius NBIS). Therefore, investors shouldn't necessarily expect Rubin to be a major Q2 revenue contributor. Instead, Wall Street will be looking for evidence that production remains on schedule, customer deployments are accelerating, and Rubin can provide another powerful growth leg as Nvidia's Blackwell series of AI chips matures. Any indication that Rubin is pulling forward orders could strengthen expectations for the second half of Nvidia's current fiscal 2027 and FY28. Nvidia's profitability will also be closely scrutinized. Management guided for a 75% non-GAAP gross margin, plus or minus 50 basis points, essentially matching the 75% achieved during Q1. That stability is important as investors assess higher memory and component costs associated with increasingly sophisticated AI systems. Some analysts expect modest pressure during the Rubin transition, but maintaining gross margins in the mid-70% range would reinforce Nvidia's enormous pricing power and help alleviate concerns that escalating hardware costs are eating into profitability. Image Source: Zacks Investment Research Another emerging concern is Nvidia's increasingly aggressive effort to help finance the infrastructure that ultimately purchases its chips. Most notably, Nvidia has provided up to roughly $105 billion of financial backing tied to an OpenAI data-center project in Ohio and is investing another $1.5 billion in SB Energy to support those efforts. Importantly, the $105 billion figure is a contingent backstop involving certain lease, power, and residual-value obligations rather than an immediate $105 billion cash expenditure. Nvidia has also teamed with major Wall Street firms on a framework intended to mobilize more than $500 billion of third-party capital for AI infrastructure, which could shift more of the financing burden away from Nvidia itself. Still, investors have reason to monitor the exposure, even with Nvidia ending Q1 with nearly $80.6 billion in cash and equivalents, while generating an exceptional $50.3 billion of operating cash flow during the quarter. The balance sheet remains extremely strong, but Wall Street will want greater clarity on how much capital Nvidia ultimately intends to put behind customers and AI infrastructure projects, especially if these commitments keep expanding. Image Source: Zacks Investment Research Despite Nvidia's massive market capitalization, its valuation no longer looks particularly excessive relative to its growth rate. NVDA is trading at 24X forward earnings, near the low end of its five-year P/E valuation range. Furthermore, Nvidia’s PEG ratio is around 0.34 with the optimum level being less than 1.0, meaning investors are paying less than one unit of P/E multiple for each unit of expected earnings growth—a metric that can make Nvidia look surprisingly inexpensive on a growth-adjusted basis. This valuation disconnect has caught Wall Street's attention. Bank of America BAC) has argued that Nvidia is significantly undervalued compared with other AI-compute names, while Cantor Fitzgerald has similarly suggested the market is failing to fully price in Nvidia's longer-term earnings power. Of course, PEG ratios become less useful when growth rates are exceptionally high, but Nvidia's combination of nearly triple-digit Q2 earnings growth and a mid-20s forward P/E certainly makes its valuation harder to characterize as expensive. Image Source: Zacks Investment Research Nvidia still has plenty to prove when it reports Wednesday. Investors will want another strong quarter, an encouraging Vera Rubin ramp, resilient gross margins, and reassurance that the company's expanding AI-financing ambitions won't create unnecessary balance-sheet risk. That said, a 24X forward P/E looks increasingly compelling if Nvidia can sustain even a fraction of its current earnings growth rate. The long-term AI investment thesis remains strong, although elevated expectations could produce significant post-earnings volatility even if results exceed consensus estimates. For now, NVDA lands a Zacks Rank #3 (Hold), suggesting investors may want to maintain existing positions while looking for Wednesday's report to provide the next catalyst for a more bullish stance. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Oracle Corporation (ORCL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Nebius Group N.V. (NBIS) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

HP Inc. is heading into fiscal third-quarter earnings with signs that its PC business is gaining ground, while Bank of America remains firmly bearish on the stock. HP Inc. (HPQ) will report results for the quarter ended July 31 after the market closes on Aug. 26, with its earnings call scheduled for 5:30 p.m. EST. The report gives investors another look at whether improving PC demand can offset growing pressure on costs and profitability. In a note given to TheStreet, BofA analyst Wamsi Mohan reiterated an Underperform rating and $18 price objective on HP. The target implies roughly 40% downside from the $29.96 share price cited in the Aug. 19 report. Mohan expects fiscal 2026 guidance to remain unchanged, while warning that pressure on Personal Systems margins could intensify before conditions improve. BofA expects HP’s Personal Systems revenue to rise about 8% year over year and 5% sequentially in the third quarter, helped by pricing, steady demand, and market-share recovery. Preliminary industry data cited by the bank showed HP recovering worldwide PC share in the second calendar quarter after losing roughly 130 basis points sequentially in the first quarter. The bank also sees HP’s U.S. share improving by about 520 basis points sequentially and 40 basis points from a year earlier. That recovery gives HP a stronger top-line setup heading into earnings, though BofA’s estimates suggest the benefit may not flow through to earnings at the same pace. HP’s latest results give some support to the demand side of BofA’s call. Personal Systems revenue rose 13% year over year to $10.2 billion in fiscal Q2, with commercial revenue up 14% and consumer revenue up 10%. Total unit shipments still fell 7%, while Personal Systems operating margin reached 5.2%. Higher selling prices helped HP offset some of that weakness in volume. HP’s quarterly filing showed Personal Systems average selling prices rose 22.3% year over year, driven by pricing actions, currency effects and a shift toward higher-value systems, while PC unit volume declined 7%. Overlooked tech stock delivers 45% earnings surprise Cathie Wood sells $11.6 million of surging tech stock Peter Thiel invests $118 million in surging big tech stock BofA expects that trade-off to become increasingly important. The bank forecasts Personal Systems operating margin falling to 4.3% in fiscal Q3 and then to 3.9% in Q4, which Mohan views as the likely trough. Higher memory costs, a heavier mix of consumer PCs, and pricing that lags rising component costs are expected to pressure profitability. BofA expects some of those pressures to begin normalizing during the first half of fiscal 2027. Printing could create another challenge for HP. BofA expects fiscal Q3 Print margins near the low end of HP’s long-term 16% to 19% range because of hardware mix and higher commodity costs, including oil and resin. The bank expects Print margin to improve to about 17.5% in the fourth quarter. That would still leave another part of HP’s business working through cost pressure as Personal Systems margins approach their expected low point. BofA forecasts fiscal Q3 revenue of $14.59 billion, slightly ahead of the $14.55 billion consensus estimate cited in its report. Its $0.63 non-GAAP EPS estimate trails the $0.67 Street estimate, highlighting the margin pressure at the center of Mohan’s bearish thesis. For fiscal 2026, BofA expects $2.97 in EPS compared with its cited Street estimate of $3.03. The bank values HP at six times its calendar 2027 EPS estimate of $3.06 to reach its $18 price target. Leadership uncertainty remains another overhang. HP appointed board member Bruce Broussard interim CEO in February after Enrique Lores stepped down, while the board formed a search committee and retained an executive search firm to identify a permanent successor. With PC demand improving, HP has a better revenue setup heading into earnings. BofA’s warning centers on what happens further down the income statement, where rising costs and weaker margins could keep pressure on earnings even as the company’s largest business regains momentum. Related: Bank of America sends tough message on HP stock This story was originally published by TheStreet on Aug 21, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

JPMorgan JPM raised its 2026 net interest income (NII) outlook after a strong second quarter, signaling that balance sheet growth is helping offset what was previously expected to be a more pronounced rate-driven headwind. The update comes at a time when the Federal Reserve has paused its easing cycle and adopted a more hawkish tone, citing persistent inflation pressures.The bank now expects NII of about $105.5 billion, up from the previously targeted $103 billion. NII excluding Markets is projected at approximately $96.5 billion compared with the earlier estimate of $95 billion. The upward revision is notable because it suggests JPMorgan is less exposed to near-term rate uncertainty than initially assumed.The macro backdrop is important here. With the Fed signaling that rates may stay higher for longer or even move higher if inflation re-accelerates, banks face a more complex environment. While higher rates can support asset yields, they also risk slowing loan demand and increasing deposit competition. JPMorgan’s guidance implies that strong loan growth and resilient deposit inflows are currently outweighing those pressures.In the second quarter, average loans rose 10% year over year and deposits increased 7%, helping stabilize NII even as earlier expectations assumed rate cuts would weigh on earnings. Growth in card revolving balances and wholesale lending also provided support. However, the higher NII outlook will not fully translate into profit expansion. JPM also raised its 2026 adjusted expense forecast to about $107.5 billion, reflecting higher activity-driven costs.The revised outlook highlights JPMorgan’s ability to generate earnings resilience in a “higher-for-longer” rate environment. Still, the key variables for investors remain the Fed’s inflation response, deposit pricing dynamics, and whether loan growth can continue if financial conditions tighten further. Two peers of JPMorgan are Citigroup C and Bank of America BAC. Citigroup’s NII recorded a three-year CAGR of 6.2% through 2025, with the uptrend continuing in the first half of 2026. The company continues to witness solid growth in loan and deposit balances. Citigroup expects NII, excluding Markets, to increase 5-6% in 2026, supported by loan growth and stabilizing funding dynamics.Bank of America is well-positioned to deliver continued growth in NII. Over 2020–2025, NII witnessed a CAGR of 6.7%, with the momentum extending into the first half of 2026. Bank of America expects 2026 NII (FTE) to grow at the upper end of the 6-8% range, reflecting confidence in the durability of this revenue stream. JPM’s shares have gained 10.9% so far this year. Image Source: Zacks Investment Research From a valuation standpoint, JPMorgan trades at a 12-month trailing price-to-tangible book (P/TB) of 3.33X, above the industry average. Image Source: Zacks Investment Research The Zacks Consensus Estimate for JPMorgan's 2026 earnings suggests a 22.6% rise on a year-over-year basis, while 2027 earnings are expected to grow at a rate of 0.3%. In the past month, earnings estimates for 2026 and 2027 have moved upward to $24.93 and $25.02, respectively. Image Source: Zacks Investment Research JPMorgan currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cisco Systems gave investors plenty to like in its fiscal fourth-quarter report, but the market’s reaction showed how high expectations have become for one of 2026’s strongest AI infrastructure trades. Cisco Systems (CSCO) reported record quarterly revenue and stronger-than-expected earnings, while management laid out another year of double-digit growth. The stock still fell sharply after the report and closed Aug. 18 at $112.90, leaving shares well below the $123.88 price used in Bank of America’s latest research note. BofA analyst Tal Liani sees an opportunity in that disconnect. Liani reiterated a Buy rating and $150 price target on Cisco in a note given to TheStreet, arguing that broad networking demand and growing AI revenue could leave room for further upside. The target now implies roughly 33% upside from Cisco’s Aug. 18 closing price. Cisco reported fiscal fourth-quarter revenue of $17.3 billion, up 18% from a year ago, while adjusted earnings reached $1.22 per share. Networking revenue jumped 28% to $9.8 billion as customers continued spending on data center and AI infrastructure. Orders were even stronger. Total product orders rose 35%, while networking orders climbed 40%. Cisco said product orders still increased 25% when hyperscaler customers were excluded, giving investors another sign that demand is spreading beyond the largest cloud companies. Trump FCC gives Tesla a leg up in critical technology race Apple’s $249 AirPods may be about to learn how to see Bank of America doubles down on Nvidia stock despite big risk Management expects that strength to carry into the new fiscal year. Cisco guided for first-quarter revenue of $18 billion to $18.2 billion and adjusted earnings of $1.32 to $1.34 per share, while full-year revenue is expected to rise to as much as $73.4 billion. That broader strength sits at the center of BofA’s bullish view. Liani noted that ex-hyperscaler order growth accelerated from 19% in the fiscal third quarter to 25% in the fourth quarter. Orders from Cisco’s four largest hyperscalers grew more than 100%, according to the note. BofA believes those trends support Cisco’s decision to double its core growth outlook for fiscal 2027 to 10% from an earlier 5% estimate. Cisco booked $4 billion of AI infrastructure orders from hyperscalers during the fourth quarter, lifting full-year orders to $9.3 billion. The company generated about $4 billion in AI infrastructure revenue during fiscal 2026 and expects that figure to reach $7.5 billion in fiscal 2027. BofA thinks that target could leave room for upside. Related: Elon Musk’s $900 billion SpaceX stake is built on more than rockets The bank expects stronger networking revenue as recent orders convert into sales and sees fiscal 2027 AI orders materially exceeding the $9 billion level reached this year. Improving momentum in Cisco’s security business could provide another boost as the company moves beyond pricing changes associated with Splunk. BofA raised its fiscal 2027 adjusted earnings estimate to $5.08 from $4.77 and lifted its fiscal 2028 estimate to $5.47 from $5.21. Cisco itself expects fiscal 2027 revenue of $72.2 billion to $73.4 billion, with adjusted earnings between $5.05 and $5.11 per share. The bullish demand outlook comes with a trade-off. Cisco’s adjusted gross margin slipped to 66.3% in the fourth quarter from 68.4% a year earlier as faster hardware growth changed the company’s sales mix. BofA expects gross margin to fall to roughly 64.5% in fiscal 2027, about 150 basis points below the Street’s outlook. Strong hardware sales and a greater cloud mix could keep pressure on profitability, even as revenue accelerates. Valuation also leaves less room for mistakes. Liani estimates Cisco trades near 25 times calendar 2027 enterprise value to free cash flow, well above its five-year average of roughly 16 times. BofA still believes the demand cycle can outweigh those concerns. With orders accelerating inside and outside the hyperscaler market, Cisco may have more growth ahead than its fiscal 2027 targets currently suggest. Related: Cisco stock flashes rare technical signal This story was originally published by TheStreet on Aug 19, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.