Core Viewpoint - Cisco Systems, Inc. is positioned to benefit from the growing demand for AI infrastructure, with a notable increase in its price target by Morgan Stanley to $91, reflecting confidence in its future performance [2]. Group 1: Financial Performance - Cisco reported a 5% year-over-year revenue growth in fiscal 2025, achieving sales of $56.7 billion for the year ending July 26 [3]. - In the first quarter of fiscal 2026, Cisco's revenue rose by 8% to $14.9 billion, indicating a positive growth trend [3]. - For fiscal 2026, Cisco forecasts revenue between $60.2 billion and $61 billion, suggesting continued momentum [3]. Group 2: Product and Market Positioning - Cisco's networking capabilities are increasingly relevant in the context of artificial intelligence, particularly with the rise of agentic AI [2]. - The company is integrating its networking products, such as Nexus HyperFabric, with Nvidia's AI software to create infrastructure suited for AI workloads [2]. - Cisco is also expanding its security offerings with the Hypershield platform, which is described as an AI-native cybersecurity solution [2]. Group 3: Market Outlook - Morgan Stanley anticipates that the AI trade will extend beyond semiconductor stocks into infrastructure companies by 2025, benefiting Cisco [2]. - The analyst notes that investors may need to be more selective for full-year returns as market multiples evolve [2].

Core Viewpoint - Investing in dividend-paying AI companies provides a way to gain passive income while participating in the rapidly expanding AI market [1] Group 1: Company Overview - Three notable AI stocks with attractive dividend yields are IBM, Cisco, and Nokia, offering diversification within the AI ecosystem [2] - IBM has a dividend yield of 2.2% and has shifted its focus to AI and cloud computing, resulting in significant sales growth [4][5] - Cisco's dividend yield is 2.1%, and the company is positioned to meet the demands of AI-driven networking with new products [10][12] - Nokia offers the highest dividend yield at 2.5% and is focusing on AI-supported 6G technology through a partnership with Nvidia [15][16] Group 2: Financial Performance - IBM's revenue rose 9% year-over-year to $16.3 billion in Q3, with its software division growing 10% to $7.2 billion [5] - Cisco reported a 5% year-over-year revenue growth to $56.7 billion for the fiscal year 2025, with an 8% increase in Q1 [12] - Nokia experienced a 4% year-over-year revenue growth to 13.8 billion euros in the first three quarters of 2025, following a decline in 2024 [18] Group 3: Future Prospects - IBM aims to achieve quantum advantage by the end of 2026, which could enhance its AI capabilities significantly [9] - Cisco expects revenue to continue rising in fiscal 2026, forecasting between $60.2 billion and $61 billion [12] - Nokia's partnership with Nvidia is expected to accelerate the development of AI-RAN technology, with testing set to begin in 2026 [16]