The Halo Effect of Cisco Systems (CSCO)
People love to talk about the "halo" effect for Apple (AAPL). That is, as iPods and iPhones gain popularity, consumers become more aware of the brand and are more apt to buy Apple PCs also, which really helps boost the company's earnings.
Well, Cisco Systems (CSCO) has a large halo effect of its own. Its halo effect has to do with the large ecosystem of companies that benefit when the tech giant is clicking on all cylanders, as it seems to be doing now.
We know this because of the incredibly bullish comments that CEO John Chambers made during and after its conference call. He said that, "he believes this is the strongest global economy he has seen in his career." He also said that CSCO is in its 2nd phase of Internet growth and believes it could be as big as the first phase we saw in the '90s. Last, he raised the company's long-term revenue growth forecast from +10-15% to +12-17%. All in all, very bullish comments.
So all of those companies up and down the supply chain should be able to ride on the Kid's tailcoat. Case in point is Broadcom (BRCM), which is surging nearly +10% today on big volume.
long AAPL, BRCM