Cisco Pops Onto Goldman Buy List

Updated from 9:17 a.m. EDT

Fresh off Monday's fanfare around its server introduction, Cisco (CSCO Quote) was placed on Goldman Sachs' conviction buy list Tuesday with a price target of $18.

The move adds Cisco to a list of tech stocks, including communications chipmaker PMC-Sierra (PMCS Quote), which was added last week, and Motorola (MOT Quote), which made the list in January.

In a somewhat apt switch, Goldman dropped Hewlett-Packard (HPQ Quote) from its list last week. The shift coincides with Cisco's bold and somewhat risky strategy to attack H-P's network server turf.

The listing gave Cisco's stock a little pop Tuesday, nudging the price up 27 cents, or 2%, to $15.72 in pre-market trading. It rose from there to close at $16.14.

Not every analyst was jazzed about Cisco's new server plan, however.

In a note Tuesday, JPMorgan analyst Ehud Gelblum reaffirmed his neutral rating on Cisco, citing new concerns about the direction of the business.

"We believe Cisco is entering a dangerous new world by locking horns with HP and quite likely IBM(IBM Quote)," Gelblum writes. The effort "could take five-to-seven years just to break even on the earnings per share line, let alone generate a penny of incremental earnings," Gelblum concludes.