New Trade for August 23rd, 2023

Inflation figures peaked at 9.1% in June 2022 and have since declined to 3.2% by July 2023. This decline signals confidence to tech investors that the economy is gradually recovering. With this backdrop, today’s recommendation focuses on one of the most attractively undervalued Nasdaq stocks to consider as investors prepare for what comes next.  

Cisco Systems (CSCO) 

Cisco Systems is a prominent network company engaged in manufacturing and supplying networking equipment. Its broad reach extends to over 190 countries, enjoying substantial consumer recognition that drives higher sales.

The company’s recent growth has been particularly robust, mainly attributable to the booming telecommunication industry. Forecasts suggest the global telecommunication market will achieve a 6% compound annual growth rate (CAGR), expanding from $1.81 trillion in 2022 to an estimated $2.65 trillion by 2030. This anticipated growth bodes well for Cisco’s long-term prospects.

In its recent financial report, Cisco exhibited strong performance. With a revenue of $15.2 billion, the company achieved a 16% YoY growth, while diluted EPS of 0.97 marked a remarkable 43% YoY increase. Net income stood at $12.6 billion, reflecting a substantial 36% growth compared to the same quarter in the previous fiscal year.

Furthermore, Cisco’s announcement of its intent to acquire Working Group Two (WG2) holds strategic significance, particularly in turbocharging its Mobility Services Platform. WG2, a Norwegian company specializing in a cloud-native mobile services platform, offers programmable APIs. This acquisition could prove pivotal for Cisco’s long-term trajectory, enhancing its capabilities in managing and optimizing wireless networks.

Financial analysts on Yahoo! Finance have projected a mean 12-month price target for CSCO at $57.21, with a price range spanning from $45.00 to $65.00. Cisco’s potential partnership with Working Group Two is poised to act as a potent growth catalyst in the foreseeable future. Investors are advised to consider purchasing this stock ahead of the full realization of this transformative acquisition.

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