Tech Stock Valuation Concerns Intensify
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Should l Buy CSCO?
Source: Fool
- Tech Stock Volatility: Since early November, tech stocks have experienced volatility due to overvaluation fears, with the Nasdaq Composite gaining only 0.48% over three months, indicating a cautious market sentiment that could impact investor confidence.
- Microsoft's Earnings Miss: Despite a 60% year-over-year profit increase, Microsoft's share price fell 10% after its January 28 earnings report, reflecting the pressure of high expectations on tech companies and prompting investors to reassess risk.
- Nvidia CEO's Remarks: Nvidia's CEO Jensen Huang highlighted in the latest earnings call that AI technology is shattering Moore's Law and driving three major shifts in computing platforms, underscoring the company's leadership in AI and its potential market impact.
- Valuation vs. Profitability: The Nasdaq-100's average P/E ratio stands at 32.9, significantly lower than the 60 during the 2000 bubble, with current tech giants being highly profitable, indicating a stark contrast to historical bubbles and potentially offering a buying opportunity for investors.
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Analyst Views on CSCO
Wall Street analysts forecast CSCO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CSCO is 89.36 USD with a low forecast of 76.00 USD and a high forecast of 100.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
10 Buy
4 Hold
0 Sell
Moderate Buy
Current: 80.640
Low
76.00
Averages
89.36
High
100.00
Current: 80.640
Low
76.00
Averages
89.36
High
100.00
About CSCO
Cisco Systems, Inc. designs and sells a range of technologies that power the Internet. The Company is integrating its product portfolios across networking, security, collaboration, applications and cloud. The Company's segments include the Americas; Europe, Middle East, and Africa (EMEA), and Asia Pacific, Japan, and China (APJC). Its Networking product category represents its core networking technologies of switching, routing, wireless, fifth generation (5G), silicon, optics solutions and compute products. Its Security product category consists of its cloud and application security, industrial security, network security, and user and device security offerings. Its Collaboration product category consists of its meetings, collaboration devices, calling, contact center and platform as a service (CPaaS) offering. Its Observability product category consists of its full stack observability offerings.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Microsoft's Earnings Miss: Despite a 60% year-over-year profit increase, Microsoft's share price fell 10% after its January 28 earnings report, reflecting the pressure of high expectations on tech companies and prompting investors to reassess risk.
- Nvidia CEO's Remarks: Nvidia's CEO Jensen Huang highlighted in the latest earnings call that AI technology is shattering Moore's Law and driving three major shifts in computing platforms, underscoring the company's leadership in AI and its potential market impact.
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- Microsoft's Earnings Miss: Despite a 60% year-over-year profit increase, Microsoft's share price fell 10% after its January 28 earnings report, reflecting the pressure of high expectations on tech companies and prompting investors to reassess risk.
- Nvidia CEO's Remarks: Nvidia's CEO Jensen Huang highlighted in the latest earnings call that AI technology is shattering Moore's Law and driving three major shifts in computing platforms, underscoring the company's leadership in AI and its potential market impact.
- Valuation vs. Profitability: The Nasdaq-100's average P/E ratio stands at 32.9, significantly lower than the 60 during the 2000 bubble, with current tech giants being highly profitable, indicating a stark contrast to historical bubbles and potentially offering a buying opportunity for investors.
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- Digital Sovereignty Push: Tuttle highlights a significant move towards digital sovereignty in Europe, ensuring that core systems and communications cannot be easily disabled if relations with the U.S. deteriorate, which will impact future technology procurement and investment decisions.
- Beneficiary Companies: He identifies several European companies, including OVH Groupe, IONOS, Orange, Deutsche Telekom, and Capgemini, that could benefit from this shift, indicating a market tilt towards local technology solutions.
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See More
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See More
