This Analyst’s Prediction on Cisco (CSCO) Was Right Amid ‘Unbelievable’ Free Cash Flow

Cisco is currently in the limelight as Wall Street analysts issue bullish ratings for the stock amid renewed AI enthusiasm and the company’s better-than-expected quarterly results last month. The stock is up 7% over the past 30 days.

Kevin Simpson, Capital Wealth Planning founder and CIO, talked about the stock during a recent program on CNBC:

“We got a little lucky—we got into it at 61. We thought the earnings would be good. We’ve seen some of the larger tech companies really do surprisingly well in Q1 earnings. The Splunk acquisition, for the first time, is really absorbed into it. Free cash flow is unbelievable again, along with dividend and dividend growth. But ironically, it’s in the growth strategy as opposed to the dividend strategy at the moment.”

Cisco beat fiscal Q3 estimates and increased its fiscal fourth-quarter revenue outlook to a range of $14.5 billion to $14.7 billion and full-year guidance to between $56.5 billion and $56.7 billion. AI infrastructure orders topped $600 million in the third quarter, pushing the year-to-date total past $1 billion and meeting the company’s full-year target a quarter early. Cisco also announced new AI partnerships with NVIDIA, Saudi Arabia’s HUMAIN, and G42, signaling growing confidence in long-term demand.

Engineers using the latest Cisco TelePresence technology to collaborate with colleagues around the world.

GreensKeeper Asset Management stated the following regarding Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2024 investor letter:

“In the third quarter, we decided to exit our investment in Cisco Systems, Inc. (NASDAQ:CSCO), as we believed the stock had become fully valued and reallocated the capital to one of our international positions. We also initiated a new position in a Canadian company shortly after the quarter ended. As we may still accumulate shares, we will defer discussing this new holding for the time being. Our top ten positions are detailed in the table below. Further portfolio disclosures, including performance statistics, are available on the pages immediately following this letter.”

While we acknowledge the potential of CSCO, 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 this cheapest AI stock.

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