1. Cisco Systems, Inc. (NASDAQ:CSCO)
Cisco Systems, Inc. (NASDAQ:CSCO) was among Jim Cramer’s Mad Money stock calls as he urged investors to exercise caution when it comes to red-hot AI stocks. Discussing Cerebras’s IPO, Cramer said:
It took away from the extraordinary performance of Chuck Robbins at Cisco, showed an incredible acceleration, both sales and earnings. Cisco was the largest company in the world at the peak of 2000. It was selling to all the big customers at the time, the companies that were building out the internet with massive amounts of fiber. A lot of it never got lit. A lot of the customers didn’t have enough money to pay. Again, investors lost fortunes with Cisco back then. This time, Cisco deserved the run. Today’s 13% rally was completely justified and then some. It wasn’t a mania. It wasn’t fanciful.
Cisco Systems, Inc. (NASDAQ:CSCO) creates networking, security, and collaboration tools that help organizations stay connected and protected. During the May 11 episode, Cramer noted that he regretted trimming the stock, as he stated:
Next is one that I regretfully sold, and I wish I hadn’t. It’s called Cisco Systems, which is more networking than cybersecurity, but it’s in the business, and it’s a top-five holding of the CIBR ETF… Now, more importantly, Lang notes that Cisco’s been chugging ahead like a freight train. Look at this freight train, man, this thing is just incredible, with a rapid series of higher highs and higher lows, and it’s been rallying on very strong volume…
Now, when you look at the relative strength index, the RSI… this is an important momentum indicator too, it’s flirting with overbought levels… meaning Cisco may have come up too far, too fast, but Lang points out that stocks can stay overbought for a long time. At the same time, we’ve seen a huge surge in the Chaikin Money Flow…
…Right now, Cisco trades in the high $90s, and Lang sees it clearing $100 real soon, likely on the way to $110. Keep in mind, though… Cisco reports on Wednesday, just made a new all-time high today. You might want to wait for a better entry point. I’m hoping it posts a quality set of numbers and sells off anyway. Wouldn’t be the first time for Cisco. That might be a good chance to jump on.
While we acknowledge the potential of CSCO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CSCO and that has 100x upside potential, check out our report about the cheapest AI stock.
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