Cisco’s Order Book, Comments Support Our View on Three Holdings
Cisco’s global AI partner study finds we are in the early innings of adoption for the technology.
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In today’s Daily Rundown video, we discussed the comment from Foxconn that it sees its AI server business growing to 50% of overall server revenue next year, up from 40% this year. That’s a positive data point for our shares of Nvidia NVDA ahead of its earnings report next week as well as for Marvell MRVL shares. Coming into this week, we shared we would be paying attention to Cisco’s CSCO earnings report this week, especially its comments on AI, enterprise networking and carrier infrastructure.
What Cisco shared on its earnings call was not only supportive of AI and data centers, but for those other key segments at Marvell as well. The company’s networking portfolio saw double-digit order growth with far stronger growth from cloud, which bodes well for the expected rebound in Marvell’s non-AI/data center segments. Cisco management explained that strength, sharing that the company “booked further platform sales with global enterprise customers who are leveraging our technology platforms to modernize and automate their network operations to prepare for large-scale connectivity to AI applications.”
Cisco’s comments about data center were also very positive for Nvidia and Marvell but also Eaton ETN. Its data center-related products posted double-digit order growth during the October quarter, with management noting that the rate of growth accelerated compared to its July quarter.
Those are all very supportive comments but as we think about AI adoption and what that means for several of our holdings in the Portfolio, Cisco shared something that indicates we are still in the relatively early innings:
“Findings from our new global AI partner study show that IT partners around the world are anticipating a transformative wave of AI technology demand driven by infrastructure, cybersecurity, and customer experience, which they expect to fuel the majority of their revenue over the next four to five years.”
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At the time of publication, TheStreet Pro Portfolio was long NVDA, MRVL and ETN.
