LAS VEGAS - Cisco Systems Inc. (NASDAQ: NASDAQ:CSCO) announced at its annual Cisco LIVE 2024 event the launch of a $1 billion global AI investment fund aimed at advancing industry innovation and enhancing customer readiness for an AI-powered future. The fund is part of Cisco's strategic initiative to connect and protect organizations through AI technology.
The investment will support Cisco’s expansion into AI-enriched networking, security, and observability solutions across its entire portfolio. These new offerings are designed to provide customers with the necessary visibility and insights to manage their digital footprint and build digital resilience effectively.
Cisco's Chair and CEO, Chuck Robbins, expressed excitement about the new AI capabilities, stating, "Cisco is uniquely positioned to revolutionize the way infrastructure and data connect and protect organizations of all sizes, and we are confident we are the right strategic partner for our customers in this era of AI."
The company's investment arm, Cisco Investments, has already made strategic investments in companies like Cohere, Mistral AI, and Scale AI, which will contribute to advancing critical areas such as compute infrastructure, foundational models, model development, and training.
At the event, Cisco also highlighted its customers, including names like Steve Madden, Room & Board, Marriott, and McLaren F1 Racing, showcasing the pivotal role Cisco plays in their business and technological strategies.
Among the innovations unveiled were the Cisco Nexus HyperFabric AI clusters, which integrate with NVIDIA (NASDAQ:NVDA) to streamline AI infrastructure deployment and management, and the Cisco Networking Cloud, which now includes AI-native Digital Experience Assurance innovations from Cisco ThousandEyes.
In security, Cisco announced new capabilities for the Cisco Security Cloud, as well as support for AMD (NASDAQ:AMD) Pensando DPUs and Intel (NASDAQ:INTC) IPUs through Cisco Hypershield, enhancing enterprises' ability to establish an AI-driven, distributed security architecture.
For observability, Cisco's acquisition of Splunk (NASDAQ:SPLK) has been leveraged to create AppDynamics Log Observer Connect, which combines Cisco’s new AI Assistant and Splunk Log Observability with Cisco AppDynamics Application Performance Monitoring (APM).
Additionally, Cisco introduced AI-powered contact center and hybrid work innovations, including an AI Assistant for Webex Suite and new remote device management capabilities in Webex Control Hub.
To foster AI skills development, Cisco announced AI Fundamentals for Partners and a new Cisco Certification in AI, aimed at building an AI-ready workforce.
Cisco LIVE 2024 has drawn over 20,000 in-person attendees and nearly one million virtual participants, underscoring its significance in the global Cisco community. This information is based on a press release statement from Cisco Systems, Inc.
InvestingPro Insights
In the wake of Cisco Systems Inc.'s bold move to launch a $1 billion AI investment fund, the company's financial health and market position are crucial for investors monitoring the impact of this strategic initiative. Cisco, a dominant force in the Communications Equipment industry, is trading at a P/E ratio of 15.64, indicating a premium valuation relative to near-term earnings growth. This is further highlighted by a PEG ratio, which stands at 2.51 for the last twelve months as of Q3 2024, suggesting that investors are expecting higher earnings growth in the future compared to the company's current earnings growth rate.
Despite the challenges presented by a slight revenue contraction of -12.83% in the recent quarter of 2024, Cisco remains profitable with a gross profit margin of 64.65% over the last twelve months, underscoring its ability to maintain robust margins. Additionally, the company's commitment to shareholder returns is evident through its dividend track record, having raised its dividend for 13 consecutive years, with a current yield of 3.43%.
InvestingPro Tips highlight that while Cisco operates with a moderate level of debt and short term obligations exceeding liquid assets, analysts have revised their earnings downwards for the upcoming period, and the stock is trading near its 52-week low, which could present a potential opportunity for investors. For those looking to delve deeper into the company's prospects, there are 10 additional InvestingPro Tips available, offering a comprehensive analysis of Cisco's financials and market performance. To enhance your investment strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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