5. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Investors in Q1 2024: 58
Cisco Systems, Inc. (NASDAQ:CSCO) is one of. the biggest and oldest networking equipment companies in the world. This has also allowed it to establish a foothold in the cybersecurity industry through providing products such as threat management, AI based security assistant, firewalls, and cloud security. Cisco Systems, Inc. (NASDAQ:CSCO)’s scale and its present market share of 41% of the global enterprise network infrastructure means that the stock is somehow defensive in nature in well. This diversity means that Cisco Systems, Inc. (NASDAQ:CSCO) is able to weather slow enterprise spending in cybersecurity by counting on its hardware customer base to upgrade and maintain its infrastructure. This stability, which also limits the room for growth as Cisco Systems, Inc. (NASDAQ:CSCO)’s trailing twelve month revenue is $55.3 billion, is also evident in a forward P/E ratio of 13.42.
Cisco Systems, Inc. (NASDAQ:CSCO) is also aggressively targeting the cybersecurity industry through its AI powered Hypershield platform and Splunk acquisition. Management shared details about Hypershield and Splunk during the Q3 2024 earnings call where it outlined:
“As I mentioned earlier, last month, we introduced Cisco Hypershield, the first truly distributed AI-native cybersecurity solution, which will be built into our networking fabric. This new innovation leverages the recently closed Isovalent acquisition to facilitate deployment in software and the first shipment is scheduled for August this year. This launch furthers our vision for the Cisco Security Cloud, which is expected to deliver the industry’s most comprehensive unified platform with end-to-end solutions, making it easier for our customers to protect against the threats of today and tomorrow. Our newest available security solutions, XDR and Secure Access continue to ramp quickly with strong customer feedback. Just last week at RSA, we also announced the integration of Cisco XDR with Splunk Enterprise Security, which will give our customers even more value and insights.
The closing of the Splunk acquisition in Q3 will also enable us to begin driving revenue synergies in our security and observability markets. Upon closing the deal, we identified 5,000 existing Cisco customers who have the potential to become meaningful Splunk customers and our sales teams are already making those connections. We also see significant opportunities for revenue synergies by leveraging Cisco’s robust partner and customer ecosystem in markets where Splunk had limited or no presence. Earlier this week, Splunk was ranked as the leader in Gartner’s Magic Quadrant for security incident and event management, which is a testament to the strength of the offering and the continued business momentum that Splunk has delivered. We are working on rapid integration, investing in both product integration and go-to-market resources, starting with aligning our Cisco and Splunk sales forces and accelerating channel enablement processes for cross-selling and upselling our combined solutions.”
