Is Cisco Systems, Inc. (CSCO) the Best Dow Stock?

We recently published a list of The Best and Worst Dow Stocks. In this article, we are going to take a look at where Cisco Systems, Inc. (NASDAQ:CSCO) stands against other Dow stocks.

The Dow Jones Industrial Average is a benchmark index of the top 30 companies in the US. It represents the strength of the US economy and carries great historical significance as well.

It also acts as a reference point for analysts and investors. However, not all stocks within this elite group of companies perform equally. While some thrive on innovation and economic boom, others struggle due to various setbacks and economic trends.

We decided to break down the index and find out the best and worst stocks, looking at what was making them perform unexpectedly this year.

Methodology

In order to come up with our ranking of the best and worst Dow stocks, we first assigned a rank to each stock based on the number of hedge funds holding the stock. We then looked at the short interest in each stock and assigned the top rank to the company with the least short interest.

We then combined the two ranks to see which stock was the best on average. The list is in ascending order, with the best stock taking the number one spot.

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 Holders: 84

Short Interest as of Apr 30, 2025: 1.49%

Cisco Systems, Inc. (NASDAQ:CSCO) is a manufacturer, designer, and seller of Internet Protocol-based networking and other products relevant to the information technology and communications industry. Investment firm Citi recently recommended the stock as its top pick in the hardware space and communications equipment.

At the end of last month, Cisco Systems, Inc. (NASDAQ:CSCO) launched new Webex AI solutions. This launch aims to improve collaboration and customer experience. New Webex AI solutions consist of Webex Calling Customer Assist, new workflow automation solutions for AI Assistant, and new features within Webex Control Hub.

Executive Vice President and Chief Product Officer, Jeetu Patel mentioned:

“Enterprises are starting to realize the potential of agentic AI. It is reinventing what it means for people and technology to work together across the physical and digital worlds.”

As per the company’s provided outlook, it anticipates revenue growth of about 10.2% for Q3, a significant acceleration compared to the previous quarter. However, EPS guidance presents a significant slowdown from the last quarter. Anticipated EPS growth for Q3 is around 3.4% as compared to the previous quarter’s EPS growth of 8%. This blend of acceleration and slowdown indicates strong business activity hampered by margins and profitability challenges.

Overall, CSCO ranks 15th on our list of best and worst Dow stocks. While we acknowledge the potential of CSCO as an investment, our conviction lies in the belief that some 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.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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