5 Best Pick and Shovel AI Stocks to Buy for the Long Term

In this article, we will discuss the 5 Best “Pick and Shovel” AI Stocks to Buy for the Long Term. Please visit the 10 Best “Pick and Shovel” AI Stocks to Buy for the Long Term, if you would like to see the extended list and the methodology behind it.

5. Cisco Systems

Short Interest: 1.5%

Cisco benefits from the AI buildout because of its relevance to the networking and connectivity layer that large AI systems depend on. As hyperscalers such as Meta, Amazon, Alphabet, and Microsoft expand spending on data centers, a significant portion of that capital is directed toward networking infrastructure needed to connect massive clusters of GPUs and servers. Cisco Silicon One networking silicon platform and optical networking are used in hyperscaler environments, where performance and low-latency communication between machines are critical for training and running AI models.

Cisco Systems recently surged to new highs, posting its biggest one-day gain since 2011 after strong quarterly results and upbeat guidance. The company’s AI networking business grew strongly, helping drive investor optimism around its position in the AI infrastructure cycle. HSBC upgraded Cisco from Hold to Buy and said AI is becoming a structural tailwind for the company, with AI revenue having a bigger-than-expected financial impact. The firm expects AI to account for about 6% of Cisco’s revenue in fiscal 2026 and around 9% in fiscal 2027.