5 Best Telecom Companies to Invest In

4. CISCO SYSTEMS INC

Number of HFs: 64

Cisco Systems Inc. (NASDAQ:CSCO) is a multinational technology company based in San Jose, California, known for its global leadership in networking and IT infrastructure solutions. Established in December 1984 by Leonard Bosack and Sandy Lerner, Cisco has been a key player in shaping the Internet and advancing networking technologies.

As of November 21, 2023, Cisco Systems Inc (NASDAQ: CSCO) reported its quarterly results, highlighting its continued success in the networking equipment sector. The company reported a year-over-year revenue increase from $13.6 billion to $14.7 billion, accompanied by a rise in net income from $2.67 billion to $3.64 billion. Cisco’s financial strength underscores its market leadership and strategic endeavors. Notably, the company’s emphasis on software and subscription models reflects an adaptation to changing industry consumption patterns, suggesting potential sustained growth. However, Cisco faces challenges in the competitive landscape and supply chain dynamics, requiring strategic navigation to maintain its leadership position.

Oakmark Fund said the following about Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2023 investor letter:

“Cisco Systems, Inc. (NASDAQ:CSCO) is the leading networking solutions company. Networking equipment becomes more important as businesses modernize their IT infrastructure, and Cisco is well positioned to capture this demand given its broad portfolio and highly effective go-to-market strategy. Cisco is transitioning away from selling mainly transactional hardware and toward selling more software and subscriptions. This shift is expected to accelerate revenue growth, improve operating margins and build recurring revenue. Despite these notable business improvements, Cisco still trades near a trough valuation relative to the S&P 500 Index. More recently, Cisco announced its intention to acquire Splunk, a leader in security and observability, adding to its already strong position in the increasingly important security market. At a low-teens multiple of our estimate of normalized earnings, Cisco is trading comfortably below our estimate of intrinsic value.”

A telecommunications tower in a rural setting, showing the reach of cloud telecom services.