Cisco Systems, Inc. (CSCO) Outgrows International Business Machines Corp. (IBM)

Amazon.com, Inc. (NASDAQ:AMZN) has been aggressively investing in property and equipment in order to expand its distribution capabilities and data-center operations. Amazon.com, Inc. (NASDAQ:AMZN) reported that it increased its spending by 114% year-over-year in property and equipment related purchases. The company’s aggressive growth strategy could reward shareholders over the long-term. Analysts on a consensus basis anticipate the company to grow its earnings by 37.15% on average over the next 5 years.

Conclusion

Cisco Systems, Inc. (NASDAQ:CSCO) seems to be doing better than IBM. The company has been able to better manage its costs while also increasing its revenues. Cisco Systems, Inc. (NASDAQ:CSCO)’s virtualization solution contributed significantly to the company’s revenue growth in its most recent quarter.

Investors who are looking for higher rates of growth may consider Amazon as a potential alternative. However, the valuation could be rich for investors who are looking for value. If value is the investment objective, Cisco could be the better of the two as Cisco has been able to beat analyst expectations by a wide margin. Cisco may be able to sustain higher rates of growth due to opportunities in the cloud, and if that is the case, Cisco could potentially be undervalued.

The article Cisco Outgrows IBM originally appeared on Fool.com.

Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Cisco Systems. The Motley Fool owns shares of Amazon.com and International Business Machines. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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