15 AI News Investors Should Not Miss

8. Cisco Systems, Inc. (NASDAQ:CSCO)

Number of Hedge Fund Holders: 61

Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational digital communications technology conglomerate corporation offering a vast portfolio of technology innovations. The company has integrated AI-powered capabilities across many of its products, introduced a $1 billion fund earlier this year to invest in AI startups, and even maintains a strong foothold in cybersecurity, offering AI-powered security tools, and much more.

On Wednesday, October 16, Citigroup analysts upgraded the stock to “Buy” from “Neutral” and raised the price target to $62 from $52 per share. This reflects an estimated 15% upside from Tuesday’s close. According to Citi analysts, investors shouldn’t overlook the artificial intelligence potential of Cisco Systems, Inc. (NASDAQ:CSCO). The upgrade in the networking company’s shares by analyst Atif Malik highlights a narrowing valuation gap relative to peers, as well as a rapidly expanding AI Ethernet total addressable market that is projected to reach $10 billion by 2025.

“While AI is currently a small piece of the biz (~2% of revs), we see the potential for a stronger contribution,” he wrote. “With more AI coming, we are incrementally more constructive on the group and expect continued investor rotation out of semis/hardware into networking equipment to benefit group valuation.”

Furthermore, the addition of the company’s products in Meta Platforms’ AI hardware comes as a “positive validation of CSCO’s technology.” With at least three major hyperscalers already using its tools in their backend networks, Malik believes that the company’s $9 billion 2027 hyperscaler AI opportunity forecast may be “potentially understated”. The analyst has also increased his earnings per share estimates for 2025 and 2026 by 2% and 5%, respectively.

“We believe shares warrant a sizable discount to networking peer valuation to reflect lingering share loss concerns, somewhat tempered by growing AI opportunities. Even at a 30+% discounted target multiple to peer average, we see meaningful upside to shares”.