2024-07-21 15:05:45 ET
Summary
- AI stocks' forward-12-month earnings growth estimates are falling, contrasting with rising S&P 500 EPS trends, allowing for some new entrants into the key theme.
- Cisco's EPS revisions are mixed, but potential growth opportunities in AI could lead to a higher valuation amid subdued expectations.
- Cisco's earnings, valuation, dividend yield, and free cash flow forecasts suggest the stock is undervalued while its technical situation is less sanguine.
- I highlight key price levels to monitor ahead of earnings due out next month.
Ahead of the two busiest weeks of the second quarter reporting period, there is a stealthy cautious approach to the recently-red-hot AI theme. Bank of America Global Research reports that forward-12-month earnings growth estimates for AI stocks are falling. Contrast that to generally rising S&P 500 EPS trends. What’s more, firms adjacent to the AI theme still appear to be faring well in terms of profit expectations. ...
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For further details see:
Cisco: The Valuation Case Is Strong; AI And Splunk Help