We recently Top 10 AI Stocks Upgraded by Wall Street AnalystsCisco ranks 9th on the list, which is why this stock is worth taking a closer look at.
There's been a lot of noise about AI stock valuations and investors overpaying for big tech stocks that promise productivity gains, real AI products, AGI, and other things that are still far away. But the market doesn't seem to care what AI skeptics and naysayers believe. There's no end in sight to the AI-driven stock rally, and analysts expect more to come. Goldman Sachs' Scott Rabner recently said that a “wall of money” is coming toward the market. Rabner pointed to the massive $7.3 trillion sitting in money market funds and said he thinks the floodgates will open and investors will pour that money into stocks. Rabner's model predicts that billions of dollars ($29 billion to be exact) will flow into the market in the third quarter of 2024.
You don't need a crystal ball to know where billions of dollars are headed. AI is the hot topic everyone is betting on, and everyone is betting on it: pundits, billionaires, asset managers, and long-term value investors. Fundstrat Global Advisors co-founder Tom Lee recently told CNBC that investors have been “hesitant” for most of the year, but should “stick” with “what's working.” According to Lee, the topics that have been doing well lately are AI, weight loss drugs, and related topics.
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In this article, we've highlighted the top AI stocks that Wall Street analysts have recently upgraded or made bullish comments about. For each stock, we've included the number of hedge fund investors. Why are you interested in stocks that hedge funds are flocking to? The reason is simple: our research shows that by mimicking the top stocks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small and large stocks each quarter, and has returned 275% since May 2014, beating the benchmark by 150 percentage points. (Click here for details).
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Cisco Systems, Inc. (NASDAQ:CSCO)
Number of hedge fund investors: 58
Cisco Systems Inc. (NASDAQ:CSCO) is making headlines after launching a $1 billion investment fund to invest in AI startups. Cisco Systems Inc. (NASDAQ:CSCO) also announced a new partnership with Nvidia to simplify the development of generative AI applications. Wall Street sees Cisco Systems Inc. (NASDAQ:CSCO) as a promising AI stock due to Cisco Systems Inc. (NASDAQ:CSCO)'s $28 billion acquisition of Splunk. Cisco Systems Inc. (NASDAQ:CSCO) expects the AI switching market to exceed $10 billion in the next three years. Cisco Systems Inc. (NASDAQ:CSCO) has several AI-focused products, including its AI-native cybersecurity solution Hypershield, AI Assistant, and other AI infrastructure solutions.
In May, Cisco Systems Inc. (NASDAQ:CSCO) reported strong third quarter results, beating EPS estimates by 7.3% and revenue by 5.50%. Cisco Systems Inc. (NASDAQ:CSCO) also raised its full-year revenue guidance. Analysts at Bank of America, led by Tal Liani, said in a note that excluding the impact of Splunk and assuming FY25 revenue growth guidance of around 3%, Cisco Systems Inc. (NASDAQ:CSCO) management expects Cisco Systems Inc. (NASDAQ:CSCO) revenue (excluding Splunk) to grow 5% next year, a solid improvement. Bank of America has a buy recommendation and a $60 price target on the stock.
Morgan Stanley analyst Meta Marshall praised Cisco Systems (NASDAQ:CSCO)'s third-quarter results last month, saying the company was able to beat expectations “slightly” on better-than-expected orders. The analyst rates Cisco Systems (NASDAQ:CSCO) an Overweight stock with a $58 price target. Marshall believes Cisco's 2025 earnings outlook is “achievable.”
Overall, Cisco Systems Inc. (NASDAQ:CSCO) The 9th Insider Monkey's List 10 AI Stocks That Analysts Are Upgrading. You can visit 10 AI Stocks That Analysts Are Upgrading To see other AI stocks analysts are watching, while we acknowledge Cisco's potential, we believe smaller, less visible AI stocks have a lot more potential to deliver higher returns in a shorter time frame. If you're looking for AI stocks with better prospects than Cisco but trading for less than 5x, check out our report on Cisco. Cheapest AI Stocks.
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Disclosures: None. This article was originally published on Insider Monkey.
