Jim Cramer, a famous investor and author of the book “The Insider’s Guide to Investing”, says that insider confidence alone is enough reason for investors to buy Cisco Systems Inc. (NASDAQ: CSCO), despite its weakness following earnings.
Cisco shares are down by 2% as of this writing, after it reported its fourth consecutive quarter revenue decline.
The company’s first quarter financial results were still ahead of the Street expectations.
Cisco Systems shares are now up by more than 30 percent compared to their lows for the year so far, which were set in early August.
Cisco CEO is still a bullish individual
Jim Cramer was positive as he spoke about Cisco’s quarterly release today on CNBC.
He prefers to own this networking hardware company because “I don’t think I have seen Chuck Robbins, the chief executive of that firm be so bullish” in an interview with Mad Money on last night.
Cisco Systems CEO Robbins anticipates that the continued strength of the global economy, including Europe, will translate into more business.
It has already signed a contract with Meta Platforms, and it expects “a lot” more business in the future from hyperscalers.
Cisco’s shares pay out a current dividend yield of 2.76 percent, another reason for you to stay invested.
CSCO has been a major AI beneficiary
Jim Cramer is still positive on Cisco’s stock, mainly because the company has benefited from AI.
Cisco has received over $300,000,000 in orders from clients for AI infrastructure. The company is confident of exceeding its target of $1 Billion of AI orders from Web-scale Customers this year.
California’s company, has launched products that use Nvidia processors and will “overtime” support GPUs other than Nvidia as market demands.
Chuck Robbins, CEO of GE Energy expects strong growth in 2025 as a result of the “real deployment” of certain technologies by the enterprise. He increased the guidance for the entire year last night from $3.60 to $3.66 per share on revenue of up to $56.3billion.
JPMorgan expects Cisco to rise from $66
JPMorgan Chase analysts seem to be in agreement with Mad Money’s host.
The investment firm has upgraded CSCO’s stock to “overweight”, citing high enterprise networking demand.
The industry forecasts are still predicting a +5% increase in the aggregate for WLAN, DC, and Campus Switches in 2025 after a decline of double-digit percentage in 2024.
JPM acknowledged that the quarterly update in the short term may be choppy during the initial stages of the recovery, but recommended Cisco for its medium-term potential. This investment firm believes that shares in this multinational could rise to $66. That’s a 14 percent increase.
The AI-enabled software and hardware market will grow by at least 40% annually to reach a valuation of $780 billion at the end of 2027.
The post Cisco’s CEO is ‘as optimistic as ever’, but the stock price continues to drop. This may change as new information becomes available.
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