We recently published a list of 10 AI Stocks Making Waves: GTC Highlights & Beyond. In this article, we are going to take a look at where Cisco Systems, Inc. (NASDAQ:CSCO) stands against other AI stocks that are making waves with insights on GTC highlights.

A new open-source model from Mistral AI is shaking things up in the tech world. This groundbreaking model outperforms comparable models like Gemma 3 and GPT-4o Mini, delivering inference speeds of 150 tokens per second. Mistral Small 3.1 surpasses the performance of leading small proprietary models across dimensions such as handling text, understanding multimodal inputs, supporting multiple languages, and managing long contexts, all that with low latency and cost efficiency.

Shifting focus to China, Tencent has recently captured attention with its suite of new artificial intelligence tools capable of converting text and images into 3D visuals. The company has released five open-source models based on its Hunyuan3D-2.0 technology, including “turbo” versions that can generate 3D visuals within 30 seconds while maintaining high precision and quality.

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Like many other Chinese firms, Tencent is advancing China’s position in the AI arms race by expanding its capital expenditures. According to Tencent President Martin Lau, capital spending would rise to the “low teens” as a percentage of revenue, and artificial intelligence will be a key focus of strategic investments.

“We will continue to increase our AI investments, increasing investment in our proprietary Hunyuan model while expanding our contributions in multimodal and open-source capabilities.” –Martin Lau.

Meanwhile, once an AI leader in China, Baidu is also striving hard to regain its position in the tech world. The company has released two new free-to-use artificial intelligence models, including its first reasoning-focused model. The move comes ahead of its plans to move toward an open-source strategy.

According to an article by The Financial Times on why China is suddenly flooding the markets with AI models, retaliation appears to be the driving force. When the US tightened its grip on advanced artificial intelligence technologies in January, it blocked off China’s access to advanced AI chips and locked proprietary models behind trade barriers.

Even though it seemed that China would retaliate by doubling down on secrecy, it’s doing quite the opposite, and with good reason. Chinese tech groups are seemingly creating an ecosystem where developers can continuously revamp their models. Provided open-source becomes powerful enough, there would be no reason to pay for closed models if free, equally capable alternatives exist.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

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)

Number of Hedge Fund Holders: 84

Cisco Systems, Inc. (NASDAQ:CSCO) is an American technology company that provides information technology and networking services. On March 18, the company unveiled an AI factory architecture with NVIDIA that embeds security within all layers, from the application to the workload, and the infrastructure. Building on the expanded partnership that was launched last month, the two companies are developing the Cisco Secure AI Factory with NVIDIA to streamline how enterprises deploy, manage, and secure AI infrastructure at any scale.

To secure the infrastructure and software for developing and delivering AI applications, there was a need for a new architecture that embeds security at all layers of the AI stack and also expands and adapts to changes in underlying infrastructure. Cisco and NVIDIA’s partnership on the NVIDIA Spectrum-XTM Ethernet networking platform serves as the base for the Cisco Secure AI Factory with NVIDIA. Together, the two companies will provide customers the flexibility to build and secure data centers to develop and run AI workloads.

“AI can unlock groundbreaking opportunities for the enterprise. To achieve this, the integration of networking and security is essential. Cisco and NVIDIA’s trusted, innovative solutions empower our customers to harness AI’s full potential simply and securely.”

-Chuck Robbins, Chair and CEO, Cisco.

Overall, CSCO ranks 7th on our list of AI stocks that are making waves with insights on GTC highlights. While we acknowledge the potential of CSCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CSCO but 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.