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Cisco Systems (CSCO) AppDynamics Launches New Cloud Solutions

Cisco Systems CSCO recently unveiled new major updates like business transaction insights in its AppDynamics Cloud solution for IT professionals. The new updates will allow organizations to expand observability over cloud-native applications and drive operational efficiency across Amazon’s AMZN Amazon Web Services (“AWS”) environment and beyond.

The new AppDynamics solutions will help support digital services, cloud-native applications, and workloads on AWS.

The world is going through its fourth industrial revolution, which is data-driven and the primary reason behind the rise of digital transformation. Various enterprises are investing heavily to rapidly digitize their organizations, reflecting the rising demand for various cloud solutions.

As per a recent Cisco AppDynamics Survey of 1,150 IT professionals, 71% believe that their organizations globally need to invest toward the observability of cloud-native applications and infrastructure to seamlessly digitize business operations and reduce operating costs in the process.

Per Gartner, 81% of organizations have a multi-cloud strategy. Organizations are utilizing cloud services for everything from hosting data centers to enterprise applications.

As such, Cisco’s latest release of new updates in the AppDynamics cloud solutions will help attract various organizations who are looking to digitize their business operations and help in maximizing the return on investments of companies in areas including Kubernetes, microservices and other AWS infrastructure. The recent launch of Cisco App Dynamics updates will attract more users using AWS to its services, thus creating new revenue growth opportunities.

Cisco Systems, Inc. Price and Consensus


Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. Price and Consensus

Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote


Cisco New Solution to Drive Prospects

The world is going through its fourth industrial revolution, which is data-driven and a primary reason behind the rise of the Internet of Things (IoT). Various enterprises are investing heavily to rapidly digitize their organizations, reflecting the shift to IoT, Artificial Intelligence (AI) Machine Learning (ML), digitization and various cloud solutions.

As such, Cisco is investing heavily to build products and solutions that leverage. The company, with its recent product launches, is trying to address the megatrends such as hybrid cloud, cloud security, 400-gig, 5G and WIFI 6, which is likely to drive the stock in the long run.

Cisco has guided revenue growth for the first quarter of 2023 to be between 2-4% compared with the year-ago quarter. The Zacks Consensus Estimate for revenues is pegged at $13.33 billion, suggesting growth of 3.33% from the year-ago period.

However, overall negative sentiments about the cyclical tech industry due to rising inflation, probable recession due to the U.S. Federal Reserve’s interest rate hikes and volatile Forex conditions have led to the fall in Cisco’s share price. The stock has tumbled 23.8% in the year-to-date period compared with the Zacks Computer - Networking industry’s decline of 23.6%.

Further, as it ventures into new markets, Cisco is experiencing stiff competition from the likes of Wipro Limited WIT in cloud securities solutions.

Wipro expanded its collaboration with VMware to help customers move data to the cloud at a reduced cost and operate in a multi-cloud infrastructure. With the recent collaboration, Wipro’s  FullStride cloud services will be able to provide its security services to customers for no additional cost and protect data while operating in a multi-cloud architecture. This is expected to help Wipro garner more customers amid rising competition.

However, to deal with rising competition in cloud solutions and networking space, Cisco, which currently has a Zacks Rank #3 (Hold), expanded its business partnership with General Dynamics Information Technology (GDIT), a business unit of General Dynamics GD. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

GD is helping Cisco to maintain its position as the largest player in the networking space. The two companies have collaborated to deliver Cisco Private 5G services to various government enterprises for IoT and edge use cases.

Cisco is expected to benefit in the coming quarters from the easing of supply chain constraints, which is likely to benefit the company in meeting its backlogs and aid top-line growth. As the company is also adding alternative suppliers, redesigning hundreds of products to use alternative components with similar capabilities and targeted price increases is likely to aid the company in fending off cost inflation and supply chain constraints. These are expected to aid the company’s top-line growth in the coming quarters.

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