Morgan Stanley keeps Cisco at $135 on TSMC supply edge

Morgan Stanley kept a $135 price target on Cisco, arguing the network giant has a supply edge tied to Taiwan Semiconductor Manufacturing (TSMC). The report points to Cisco’s performance during the AI buildout: the stock is up about 46% year to date and recently traded near $111. Morgan Stanley said investor sessions in mid-August reinforced one key message—Cisco is better positioned than peers to secure scarce components. It cites a strong balance sheet, larger purchase commitments, and a direct TSMC relationship. Cisco’s chip volumes with TSMC are expected to rise roughly tenfold in fiscal 2027. The note also highlights end-of-life deadlines for Catalyst 4000 by end of 2026 and Catalyst 6000 by end of 2027, which could drive upgrades, plus growth potential from “scale-across” for linking AI clusters across multiple data centers.