We recently published a list of 10 Best Bargain Stocks to Buy in May. In this article, we are going to take a look at where Cisco Systems, Inc. (NASDAQ:CSCO) stands against other best bargain stocks to buy in May.

While increasing tariffs and a hard sell-off have resulted in uncertainty, Neuberger Berman, an investment manager, expects that negotiations can bring some relief to initial tariff proposals. Furthermore, the firm anticipates a sharply slower growth than a US recession. Also, it believes that stimulus in Europe and China can rejuvenate global industrial activity, and the firm recommends styles, sectors, and regions that are most geared to it.

Investment Style- Where Do Opportunities Lie?

Given that a significant amount of tariff shock has now been priced in, Neuberger Berman is constructive on global equities for the remainder of the year. The firm expects that an ongoing recovery in the global industrial economy might be dampened but not derailed. The underlying momentum in the goods economy is expected to support equities that are most levered to it. Furthermore, the firm prefers value over growth (which is relatively expensive) and small caps over large caps. While an overdose of growth-inhibiting policy can impact the relatively healthy economy and push it into recession, the investment management firm believes that the US hasn’t yet reached that point. As per the firm, performance during the decline demonstrates relative strength in some of the more cyclical economic sectors in the US and around the world. The goods-oriented sectors, regions, and styles continue to outperform amidst the recent sell-off.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

What Lies Ahead?

S&P Global expects inflation to remain closer to 3.0% in 2025 as tariffs raise the prices along the domestic supply chain as well as for the end consumers. For 2026, the firm expects growth to pick up after a slow start. This is because of the abatement of uncertainty associated with the structure of tariffs and the further easing of the policy rate by the Federal Reserve. Also, the growth is expected to be aided partly because of a more favorable growth backdrop in the eurozone, which can help expand US exports.

Neuberger Berman opines that a combination of improving fundamentals and stabilizing risks increased the optimism in the energy sector. As per the firm, increased global industrial activity is expected to continue to buoy oil demand and keep prices aloft. Furthermore, energy seems to be the most undervalued sector in the S&P 500 relative to the current and expected earnings growth. The investment management firm believes that much of the negative news, including regulatory concerns and geopolitical risks, seem to be factored in. This suggests that energy stocks can increase as the sentiment improves.

Our Methodology

To list the 10 Best Bargain Stocks to Buy in May, we used a screener to shortlist the companies that trade at a forward P/E of less than ~20.0x. Next, we chose the ones that analysts see upside to, as of April 11. We also mentioned hedge fund sentiments around each stock, as of Q4 2024. Finally, the stocks were arranged in the ascending order of their hedge fund sentiments.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Cisco Systems, Inc. (NASDAQ:CSCO)

Forward P/E as of April 11: ~14.5x

Average Upside Potential: ~25.5%

Number of Hedge Fund Holders: 84

Cisco Systems, Inc. (NASDAQ:CSCO) is engaged in designing, manufacturing, and selling Internet Protocol-based networking and other products related to the communications and information technology industry.  Citi analysts maintained a positive stance on the company’s stock. The firm’s analysts highlighted its recent collaboration with Nvidia, which is expected to contribute to its AI order outlook. The firm’s optimism stems from the expected growth in the AI sector. Furthermore, Cisco Systems, Inc. (NASDAQ:CSCO)’s strategic moves and partnerships, mainly in the AI domain, can strengthen its position in the market.

Cisco Systems, Inc. (NASDAQ:CSCO)’s AI-driven growth strategy is expected to deliver favorable results. Given the expansion of the enterprise data center market and its critical role in it, Cisco Systems, Inc. (NASDAQ:CSCO) is well-placed to capitalize on the opportunities offered by the elevated demand for advanced AI applications and services. On February 25, the company announced plans for an expanded partnership with NVIDIA to offer AI technology solutions to enterprises. Cisco Systems, Inc. (NASDAQ:CSCO)’s expertise in networking, along with the investments in AI-specific products and services, can result in strong revenue growth. Its capability to provide end-to-end solutions for AI infrastructure can offer a competitive edge and create new market opportunities. Since enterprises continue to adopt AI workloads, they might need strong networking capabilities to aid the data-intensive applications.

Overall, CSCO ranks 8th on our list of best bargain stocks to buy in May. While we acknowledge the potential of CSCO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than CSCO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.