Cisco Systems CSCO is focusing on AI security as companies increasingly use agentic AI systems that can work on their own, make decisions and complete tasks.\u00a0<\/p>\n
In its third-quarter fiscal 2026, Cisco announced Zero Trust Access for AI agents and revealed plans to acquire Galileo and Astrix to strengthen its AI security and observability capabilities. This extends Cisco\u2019s security framework to AI-driven digital workers and helps ensure secure access and control. These additions are expected to expand the company\u2019s security and observability platform with agent identity, access management and behavior-monitoring capabilities.<\/p>\n
Cisco is also building new tools to protect the entire AI lifecycle. The company officially introduced DefenseClaw in its AI security announcement tied to RSA 2026-related security updates on March 23, 2026. DefenseClaw is an open-source solution designed to help customers safely deploy AI agents by enforcing guardrails and protecting against malicious behavior and attacks. In addition, Cisco launched new capabilities for its agentic Security Operations Center and AI observability platform, allowing organizations to identify and respond to threats faster and at greater scale.<\/p>\n
Partnerships remain an important part of Cisco\u2019s AI security strategy. The company expanded its Secure AI Factory collaboration with NVIDIA, giving customers a framework to deploy AI securely across infrastructure environments ranging from data centers to local sites. Cisco is also working with Project Glasswing, participating in the testing of Anthropic\u2019s Claude Mythos Preview model and taking part in OpenAI\u2019s Trusted Access for Cyber program.<\/p>\n
Cisco\u2019s security business is showing encouraging momentum. Cisco\u2019s Security revenues were flat year over year at $2.01 billion in the third quarter of fiscal 2026. The company reported double-digit order growth in its core security portfolio and added more than 1,000 new customers for Secure Access, XDR, Hypershield and AI Defense during the quarter. As AI adoption grows, Cisco believes demand for advanced AI security solutions will continue to increase.<\/p>\n
CSCO Faces Tough Competition in the Security Domain <\/p>\n
Cisco is facing stiff competition from Fortinet FTNT and Okta OKTA in the security domain.\u00a0<\/p>\n
Fortinet is benefiting from the increasing adoption of AI. As organizations deploy more AI applications, cybersecurity needs are becoming more complex due to higher network traffic, larger attack surfaces and greater data security requirements. In the first quarter of 2026, AI-driven security operations billings of Fortinet rose 23% year over year, supported by a broad portfolio of AI-enabled solutions. Demand for secure networking, Unified SASE and security operations remained strong, while FortiGate products gained traction in securing AI infrastructure and data centers. Fortinet expects its FortiOS platform, custom ASIC technology and long-term AI investments to help capture future AI-driven security opportunities.<\/p>\n
Okta reported strong momentum driven by rising demand for its expanding identity security portfolio. In the first quarter, new products contributed about 25% of bookings, with Identity Governance leading adoption, followed by growing traction in Privileged Access and other security offerings. The company emphasized that the rapid rise of AI agents is increasing the importance of identity management and boosting customer engagement and deal sizes. Although AI agent products are still in the early stages of adoption and are not yet a major revenue driver, Okta highlighted record pipeline levels and strong customer interest. The company expects AI-driven identity security to become a key long-term growth opportunity. Okta expects revenues between $3.185 billion and $3.205 billion for fiscal 2027, indicating year-over-year growth of 9-10%.<\/p>\n
CSCO\u2019s Share Price Performance, Valuation & Estimates <\/p>\n
Cisco shares have gained 54.3% year to date, outperforming the broader Zacks Computer and Technology sector\u2019s 15.9% increase.<\/p>\n
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Image Source: Zacks Investment Research<\/p>\n
The CSCO stock is trading at a premium, with a trailing 12-month price\/book of 9.58X compared with the Zacks Computer Networking industry\u2019s 9.37X. Cisco has a Value Score of F.<\/p>\n
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Image Source: Zacks Investment Research<\/p>\n
The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings is currently pegged at $1.17 per share, up 9 cents over the past 30 days. This suggests 18.1% growth from the figure reported in the year-ago quarter.\u00a0 <\/p>\n
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Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote<\/p>\n
Cisco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today\u2019s Zacks #1 Rank (Strong Buy) stocks here.<\/p>\n
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<\/a><\/p>\n Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report<\/a><\/p>\n Fortinet, Inc. (FTNT) : Free Stock Analysis Report<\/a><\/p>\n Okta, Inc. (OKTA) : Free Stock Analysis Report<\/a><\/p>\n This article originally published on Zacks Investment Research (zacks.com).<\/a><\/p>\n