Analysts from foreign brokerage Nomura weighed in on leading technology firms Microsoft Corporation (NASDAQ:MSFT) and Cisco Systems Inc. (NASDAQ:CSCO). The analysts reflect on Microsoft’s recent Annual Developer Conference, and Cisco’s weak conditions in January. Let’s take a closer look.

Microsoft Corporation

Microsoft held its Annual Developer Conference, Build 2016, last week in San Francisco. Nomura’s Frederick Grieb shares his takeaways from key sessions that took place at the conference; Hololens, Xamarin, Xbox One to Dev Kit transformation, and Windows Ink (the new term for the company’s support for the stylus in Windows). 

Microsoft’s Hololens (mixed reality, holographic glasses) appears promising to the analyst, however, he doesn’t incorporate it as a major influence to his model. Microsoft’s acquisition of Xamarin, which is a tool for .NET developers, will be added to Microsoft’s Visual Studio Development Environment and provided for free. This is one of the ways Microsoft intends to facilitate developer access to the company’s products, according to the analyst. Grieb adds, “It is likely that Microsoft has made this move to bring more developers to its platform. We believe this may be a successful strategy, but it also appears to highlight Microsoft’s diminished focus on Windows Phone.” Lastly, Microsoft declared that it will allow installation of “dev mode” on Xbox One and displayed increased support for Stylus within Windows.

Grieb reiterated a Buy rating on Microsoft with a 12-month price target of $65.00. 

According to TipRanks, 74% of the Grieb’s recommendations were profitable and delivered an average return per recommendation of 19%. In addition, 16 analysts, including Grieb, gave MSFT a Buy rating, 5 analysts remained on the sidelines, and 2 analysts rated the stock a Sell. Overall, these recommendations amounted to 12-month price target average of $58.28, marking a 6% upside from current levels.

Cisco Systems, Inc.

Cisco is considered to be the biggest networking company in the world and is currently facing moderate risk to quarterly estimates as it attends to structural concerns. Nomura Holdings analyst Jeffery Kvaal has provided insight on the company, reiterating a Neutral rating on the stock with a target price of $30, marking a potential upside of 5%.

The analyst notes that weak conditions in January have not improved as previously hoped, as seen in company’s CIO survey. The company’s early March survey consisted of 50 U.S. CIOs, and resulted in findings that a 1.2% budget growth may be likely in 2016. However, this is still a decrease from October findings, which indicated 3.1% growth. However, the analyst mentions that this estimate may be partially tampered, as the company’s survey skewed towards somewhat larger enterprises for the March survey. Nonetheless, the analyst mentions that the sample size was relatively large, and results remain relatively consistent with the fall survey.

Near term outlooks for the company seem positive. The analyst believes some near-term developments for Cisco include a steady campus switching refresh opportunity and the strong demand/growth in the enterprise security market. More so, the company’s security business continues to excel within its enterprise customers. Further, Cisco’s share in security has stabilized in recent quarters, with survey results revealing that the company remains the dominant leader in enterprise security.

Long term outlook for the company seems to take on a slightly different approach. The analyst mentions, “We believe Cisco’s share in data center switching has been below its market share in enterprise, and even in the data center market, Cisco’s Nexus 9000 is more successful in enterprise than in the hyperscale market.” He elaborates further on this matter noting, “We thus believe Cisco has some ground to make up to ensure the migration to the public cloud is not a headwind.”

Kvaal’s F3Q/4Q estimates are just below consensus, and his FY17 EPS estimate of $2.29 is below consensus of $2.39. Kvaal explains, “We model F3Q revenue of $11.9bn vs. consensus of $12.0bn. This equates to an adjusted 2.7% YoY growth on normalized revenue and is within the mid-point of the guided range of 1-4%.”

According to TipRanks, based on 23 analysts offering recommendations for CSCO in the last 3 months, the overall consensus is a Moderate Buy. The average price target for the stock is currently at $29.13 with a 2.97% upside.