AI Trade Skeptic Dan Niles Finally Reveals His Favorite Tech Stock for 2025

We recently published a list of 10 Stocks on Analysts’ Radar Amid Tariff Turbulence. In this article, we are going to take a look at where Cisco Systems, Inc. (NASDAQ:CSCO) stands against other stocks on analysts’ radar amid tariff turbulence.

Dan Niles, Niles Investment Management founder, predicted in a CNBC program earlier this month that unlike previous market crashes, the latest market volatility of 2025 could see a quick resolution because it was “self-inflicted.”

“Unlike prior drawdowns that you’ve seen, like the global financial crisis, you’re not going to fix the problem in a day because you’ve accumulated tons of bad mortgages. You’re not going to fix COVID because it’s a global pandemic in a day. You’re not going to fix the tech bubble meltdown because you overinvested for 5 years back in the late 1990s. This you can literally fix overnight if everybody, you know, resettles the tariffs because this is a self-inflicted wound.”

However, this does not mean Niles is bullish on the market in the long term. He still has valuation concerns and reiterated that he entered the year with cash as his biggest holding. Niles said his top five picks do not include any of the Mag. 7 companies, and he would remain cautious on valuations:

Asked about his preferences in the current market environment, the analyst warned investors to steer clear of high valuations and big promises that lie far into the future:

“I would focus on is which companies are generating a lot of cash, which ones tend to pick up market share during recessions. Those are the types of names that you want to be in because if you’re in stuff where, well, you know 10 years from now it’s going to be a big market, you’re going to get absolutely murdered if you get into a recession,” Niles said.

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For this article, we picked 10 stocks Wall Street analysts have been focusing on. With each stock, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Cisco Systems, Inc. (NASDAQ:CSCO)

Number of Hedge Fund Investors: 84

Dan Niles, Niles Investment Management founder, has been saying that AI capex is slowing down and major names like Nvidia and Apple will struggle to post strong growth in the future. However, in a latest program on CNBC, Niles was asked what specific names he likes. Here is what he said:

“I started the year with my top picks, and two of them were related to AI, but it’s companies that take advantage of all this money spent on AI infrastructure over the last two years. Well, you’re producing all this data, but then companies want to get access to it, and so that’s why I like Cisco. I think you’re going to see an upgrade in enterprise for those networks. And then telecom carriers want to be able to let consumers, through fiber, get access to that as well.”

GreensKeeper Asset Management stated the following regarding Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2024 investor letter:

“In the third quarter, we decided to exit our investment in Cisco Systems, Inc. (NASDAQ:CSCO), as we believed the stock had become fully valued and reallocated the capital to one of our international positions. We also initiated a new position in a Canadian company shortly after the quarter ended. As we may still accumulate shares, we will defer discussing this new holding for the time being. Our top ten positions are detailed in the table below. Further portfolio disclosures, including performance statistics, are available on the pages immediately following this letter.”

Overall, CSCO ranks 7th on our list of stocks on analysts’ radar amid tariff turbulence. While we acknowledge the potential of CSCO, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame.There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CSCO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.