Shares of Cisco Systems (CSCO) are enjoying a strong Wednesday, up almost 2% to $40.90. The reason? A big upgrade from Goldman Sachs.

Analyst Rod Hall initiated Cisco stock with a buy rating and $48 price target. His target, calling for more than 17% upside from current levels, is now the second-highest target on Wall Street behind only Deutsche Bank's $52 price target.

Hall makes the case that Cisco should be a "key beneficiary of capital flows in the tech hardware space led by carrier and network spending."

Cisco's emphasis on software and services hasn't gone unnoticed by investors. However, Hall says the company could make a "transformative" acquisition in an effort to accelerate this process.

This is especially true after the new tax reform laws, which will allow Cisco to bring back plenty of cash held overseas.

Despite the jitters running rampant through the stock market over the past few sessions, Cisco stock has been remarkably resilient. Shares are still up 6.2% this year and 30% over the past 12 months.

If Goldman has its way, shares will rally another 17%.

Shares of Cisco ended the day at $40.34, up 0.42%. 

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.

More from Stocks

12 Stocks That Make Up the GLUM Index

12 Stocks That Make Up the GLUM Index

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

Worth a Stunning $6.6 Trillion, Tech Stocks Have Taken Over the Market

Worth a Stunning $6.6 Trillion, Tech Stocks Have Taken Over the Market

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Here's Why Snap Shares Climbed Monday

Here's Why Snap Shares Climbed Monday