Cisco Systems (CSCO): A Strategic Buy for Small to Mid-Sized Investors
Bill's Pick at the Bell
The New York Stock Exchange (NYSE) is brimming with opportunities, but not all stocks are created equal—especially for small to mid-sized investors looking to maximize their returns without excessive risk. Today, one stock stands out as a strong pick: Cisco Systems (CSCO).
With a well-established reputation in networking, cloud computing, and security solutions, Cisco is making waves again with a new growth catalyst—artificial intelligence (AI). The company recently reported better-than-expected Q2 earnings, and its increasing exposure to AI infrastructure places it at the heart of one of the fastest-growing tech sectors.
Why Cisco Systems (CSCO) Is a Buy Today
1. Strong Earnings Performance & Upgraded Outlook
Cisco's fiscal Q2 earnings beat Wall Street forecasts, demonstrating resilience in a competitive tech landscape. Key highlights from the earnings report:
Revenue: $12.8 billion (above consensus estimates)
Earnings Per Share (EPS): $0.87 (beat expectations of $0.85)
Annual Revenue Outlook: Revised upwards to $56-$56.5 billion
Product Orders Growth: 29% year-over-year increase
Cisco is proving that its core networking business remains strong while integrating AI and cloud solutions into its portfolio.
2. AI and Data Center Expansion – The Next Growth Driver
One of the most exciting developments for Cisco is its deepening involvement in AI infrastructure. The company secured over $350 million in AI-related orders last quarter, positioning itself as a major player in AI networking.
As businesses and cloud providers expand their AI capabilities, the demand for high-speed, low-latency networking solutions is surging. Cisco's recent acquisitions and strategic partnerships in AI networking give it an edge over competitors like Arista Networks and Juniper.
3. Attractive Dividend & Stock Stability
For investors in the $1,000 to $10,000 range, dividend-paying stocks provide income alongside growth potential. Cisco offers:
Dividend Yield: 3.2% (higher than most tech stocks)
Quarterly Payout: $0.39 per share
Consistent Buybacks: Cisco regularly repurchases shares, which supports long-term price appreciation
With a strong balance sheet, over $20 billion in cash reserves, and stable free cash flow, Cisco provides both safety and upside potential in the tech sector.
Should You Buy Cisco Stock Today?
At around $50-$55 per share, Cisco is undervalued compared to other AI-driven tech stocks, making it an excellent buy for small to mid-sized investors looking for growth without extreme volatility.
Given its strong earnings, AI expansion, and solid dividend, Cisco offers an attractive entry point today. If you're investing $1,000 to $10,000, this stock can serve as a cornerstone for a tech-focused portfolio.
Bill White Says...
"Investing in companies leading technological advancements can be a game-changer for your portfolio."
Final Thoughts
With Cisco's expansion into AI networking and strong financial performance, it’s a smart buy at today's open.