Who Called It “Obsolete”? The Bullish Invitation for a 16% Upside Hidden in Cisco’s (CSCO) Recent Plunge

“U.S. stocks have become a bridge too far; they’re just out of reach.” Are you finding yourself sighing like that lately, watching the relentless depreciation of the yen? It is only natural to feel left behind while giants like NVIDIA and Microsoft soar into the stratosphere.

However, the wise investor knows that true “treasures” quietly sharpen their fangs just a short distance away from the festive clamor. Today, we put the spotlight on the networking giant, Cisco Systems (CSCO). Whether you view the recent sharp drop as a “tragedy” or a “guaranteed bonus invitation” is a distinction that will determine your asset balance several years from now. 📈

Why Cisco Systems (CSCO) Is Making Waves Now

Cisco’s stock price recently saw a decline of approximately 9.4%. Looking at this figure alone, many beginners might flee, thinking, “This ship is sinking.” However, the cold-blooded professionals on Wall Street are instead leaning in.

This is because this decline is not a result of impaired corporate value, but rather a “temporary whim” of that living creature we call the market. Let’s break down the rationale behind the 16% upside potential predicted by experts.

• A “Lean” Physical Transformation: Cisco is currently breaking away from being a mere “hardware vendor” selling routers. The shift toward software subscriptions that generate recurring revenue is, so to speak, a transition from “hunting” to “farming.” Once a contract is signed, stable cash continues to flow in.
• The “Neural Network” of the AI Boom: For the massive brain of AI to function, a robust “nervous system” (network infrastructure) to transport vast amounts of data is essential. While everyone else is frantic to dig for gold in the gold rush, Cisco continues to be the exclusive supplier of the “highest quality shovels.” 💡

The Optimal Solution for Wealth Building Chosen by Smart Investors

“The yen is weak, so it’s disadvantageous to hold foreign currency right now.” If this is how you think, it might be a bit dangerous. We must face the risk of putting all our eggs in the “single basket” of the Japanese yen.

A major U.S. stock like Cisco, which combines solid dividends with growth potential, serves as the “defensive anchor” of a portfolio. Its steady presence amidst a raging market can be described as a psychological stabilizer for investors.

Picking up high-quality stocks that have become undervalued due to temporary adjustments is an extremely rational and “royal road” strategy, especially for those of us who now hold the weapon of the New NISA.

What Is Lost by Not Acting Now

The most terrifying thing in the world of investing is not losing capital—it is losing “opportunity.” By the time the stock price climbs back to all-time highs and TV news reports that “Cisco is doing great!”, anything you get your hands on will only be the leftovers. ⚠️

How many times have you repeated the regret of “If only I had taken a step forward back then”? Observe the data calmly and move quietly when everyone else hesitates. A few years down the line, it is always these “quiet men of action” who are smiling. Your judgment in this phase will greatly influence your future.

Summary: Start by Preparing, Even with a Small Amount

There is no need to make a once-in-a-lifetime gamble. The key is to take the “first step” with a small amount using a reliable account. Simply establish a steady rhythm of accumulation and wait for the wave of the next bull market.

It is too late to prepare your board once the wave has arrived. Only those who prepare during the calm can ride the ultimate big wave.

Note: This article is intended for informational purposes only and does not constitute solicitation or advice for investment. Please make investment decisions at your own discretion.

This article is also available in Japanese.