7 Best Software Infrastructure Stocks To Invest In Now

5. Cisco Systems Inc. (NASDAQ:CSCO)

Number of Hedge Fund Holders: 61

Cisco Systems Inc. (NASDAQ:CSCO) is a global leader in networking and IT solutions, leveraging AI to optimize network performance, enhance security, and automate IT operations. The company designs, manufactures, and sells networking hardware, software, telecommunications equipment, and other advanced technology products. In addition, the company provides servers, hyperconverged infrastructure, and SaaS-based cloud operations management tools for data centers.

In Q2 2024, the company experienced a 10.27% year-over-year revenue decline. However, Cisco Systems Inc. (NASDAQ:CSCO) is well-positioned for future growth due to strong demand for its networking products, fueled by the rise of cloud computing and the increasing need for cybersecurity. Its transition to a subscription-based model further bolsters its long-term growth prospects. The recent $28 billion acquisition of Splunk is expected to significantly enhance its cybersecurity capabilities and strengthen its position in data security and analytics.

HSBC recently upgraded Cisco Systems Inc. (NASDAQ:CSCO) to a Buy rating, raising its target price from $46 to $58. The upgrade was based on improving order flows, normalized inventories, and Cisco’s strategic focus on high-growth areas. HSBC praised the company’s cautious guidance for FY25, noting that while its recent fourth-quarter results met expectations, the guidance appeared conservative. Despite announcing a 7% workforce reduction this week, HSBC projects Cisco’s non-GAAP EPS to grow at a compound annual growth rate (CAGR) of 11.6% from 2024 to 2027, with double-digit growth anticipated in networking revenue throughout most of FY25.

As of the end of Q2 2024, 61 hedge funds tracked by Insider Monkey held stakes in Cisco Systems Inc. (NASDAQ:CSCO) worth $1.59 billion, up from 58 hedge funds in the previous quarter.