Important AI Stocks for Investors: Cisco Stands Out

In recent times, there have been remarkable developments for investors searching for the best artificial intelligence (AI) stocks with the Fed's interest rate cuts. In this context, Cisco Systems Inc (NASDAQ:CSCO) is on investors' radar.

At the beginning of October, Jim Cramer stated in a program that Cisco's valuation is attractive and that it could benefit from the increasing demand for AI. Cramer said, "Cisco has introduced a new chip and network system to connect AI data centers. This is something Broadcom has effectively executed. In this context, both companies have a significant business potential that could be realized."

Cramer added, “We shouldn’t forget the old Cisco, which was overvalued in 2000. However, now Cisco is valued at 16 times its earnings, not 400 times. This is a significant development compared to another company with a price-to-earnings ratio of about 40 times. Is there enough business opportunity for Cisco and Broadcom? Don’t worry, the current business volume is very high. Broadcom is everywhere. You might consider holding shares in both Cisco and Broadcom; both are quite valuable. My charitable investment portfolio owns both. This doesn’t mean they will clash, as there are really great business opportunities, and both companies look attractive for purchase. Cisco has much lower multiples compared to Broadcom."

However, while acknowledging the potential of CSCO, we believe that some AI stocks have a greater chance of delivering higher returns and carry limited downside risk. If you are looking for a very cheap AI stock and also a significant company that benefits from Trump tariffs, we recommend checking out our free report on the best short-term AI stock we can suggest.