We recently compiled a list of the 10 Best 5G Stocks To Buy According to Short Sellers. In this article, we are going to take a look at where Cisco Systems, Inc. (NASDAQ:CSCO) stands against the other 5G stocks.
5G, or fifth-generation wireless technology, is the latest evolution in mobile networks, which is designed to significantly improve speed, reduce latency, and enhance the capacity and connectivity of mobile devices. A Market Research Future report estimates that in 2024, the 5G market is projected to be worth $15.03 billion, and by 2032, it could reach $229.41 billion. This rapid increase represents a compound annual growth rate (CAGR) of 40.60% during the forecast period. According to some experts, 5G is one of the most important trends in technology along with artificial intelligence (AI).
5G and AI Could be Catalysts of Global Digital Transformation
In a CNBC interview at the Mobile World Congress Shanghai on June 26, director-general of the GSM Association, Mats Granryd highlighted the deep connection between 5G and AI and suggested that their mutual rise is not accidental. He said that “AI feeds off 5G and 5G feeds off AI.” This is especially evident in China, where the development of standalone 5G networks is well advanced and discussions are already shifting toward 5G Advanced (5.5G). While some countries lag, like the Philippines, Mats pointed out that this dynamic between 5G and AI is most prominent in regions with widespread 5G coverage.
When asked about the rivalry between countries like the U.S. and China in AI and 5G, Mats said that such competition is insignificant. He said that from his experience on the GSMA board, which represents the 25 largest mobile operators globally, the focus is on creating common standards and specifications rather than competing.
He talked about the difficulties of the 2G and 3G eras when different technologies created challenges for global connectivity. The shift to a unified 4G standard was a pivotal moment that laid the foundation for the digital economy.
Mats believes that 5G will follow a similar path to become a common platform worldwide, which will also extend to AI. While some regions may advance faster than others initially, he showed confidence in the fact that everyone will eventually catch up and benefit from the integration of AI with 5G.
Our Methodology
For this article, we used stock screeners and ETFs to identify companies involved in the 5G market. We then selected 10 stocks with the smallest short interest and listed them in descending order of their short interest. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Engineers using the latest Cisco TelePresence technology to collaborate with colleagues around the world.
Cisco Systems, Inc. (NASDAQ:CSCO)
Short Interest as % of Shares Outstanding: 1.30%
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational technology conglomerate headquartered in California. The company started its journey in 1984 and has been a leading innovator in digital communications. It gained recognition after developing multiprotocol routers that facilitated communication across different networks. It is one of the best 5G stocks to buy according to short sellers.
61 hedge funds had stakes worth $1.6 billion in Cisco (NASDAQ:CSCO) in the second quarter. As of June 30, Harris Associates holds 10.4 million shares of the company, valued at $496.382 million, making it the company’s largest shareholder.
Cisco’s (NASDAQ:CSCO) portfolio includes a broad range of networking hardware, software, and services, specializing in areas such as the Internet of Things (IoT), domain security, videoconferencing, and energy management. Some of its products include Webex for video conferencing, OpenDNS for online security, and the Silicon One chip, which is designed to handle huge amounts of data.
Its approach to 5G is centered around its Cisco ONE architecture, which is designed for cloud and software-based management. This setup connects both business and service provider networks, which makes it easy for different types of connections to work together smoothly. This includes seamless roaming between 5G cellular networks and Wi-Fi, particularly with the latest Wi-Fi 6 technology. Wi-Fi 6 shares several features with 5G, such as improved speed and efficiency.
Additionally, Cisco Private 5G is a managed service that gives businesses all the benefits of a private 5G network without the high upfront costs or the hassle of managing it themselves. It provides fast and reliable internet, along with features like tracking and managing devices and applications for better security. Businesses can use Cisco Private 5G to boost their digital transformation, improve operations, and support various applications like robotics, asset tracking, and remote broadcasting.
Overall CSCO ranks 9th in our list of the best 5G stocks to buy according to short sellers. While we acknowledge the potential of CSCO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.