Nomura Growth and Income Fund on Cisco Systems Inc.
Thesis
Cisco was an overweight position and a key contributor to fund performance. Third-quarter revenue rose 12% year over year to a record level, while earnings and guidance exceeded expectations. The main demand driver highlighted by the fund was strong AI infrastructure spending. Cisco is also reallocating resources toward AI and security, including a workforce reduction intended to support that shift.
“earnings and guidance exceeding expectations on strong artificial intelligence (AI) infrastructure demand”
Key risks
- The company is undertaking a workforce reduction as it reallocates investment toward AI and security.