Fisher Bets Big on AI with $3.6 Billion Stake in Cisco

Billionaire Ken Fisher is optimistic about AI's future and has bet big on two companies that are leading the charge. In a recent column, he pointed out that while some people fear AI will lead to mass unemployment, history shows that innovation often creates new opportunities as well as destroying old ones.

Fisher is particularly bullish on Cisco Systems (CSCO) and Palo Alto Networks (PANW), two companies that are at the forefront of AI development. He bought 16 million shares of CSCO in the second quarter, increasing his stake in the company by 94%. The stock has been performing well, with a year-to-date gain of around 48%.

Cisco is a leader in networking and connectivity, and its recent quarterly report showed strong demand for its technology and products. Revenue was up 18% year-over-year, and non-GAAP EPS was $1.22, beating expectations by a nickel. Analyst Amit Daryanani from Evercore thinks CSCO will continue to benefit from the growth of AI and networking, with a price target of $150, implying a one-year upside potential of 37%.

Palo Alto Networks is another leader in the AI-powered digital security sector, with a market cap valuation of $271 billion. The company's Precision AI technology underlies its security platforms, which can analyze malicious traffic patterns and stop threats cold. Palo Alto sees revenue growth as well, with a 23% increase year-over-year in its latest quarterly report.