Have $6,000? These 3 Stocks Could Be Bargain Buys for 2025 and Beyond

However, Qualcomm still generates most of its revenue from the cyclical smartphone market. Its revenue soared 32% in fiscal 2022 (which ended in September 2022) as people bought new 5G smartphones, but fell 19% in fiscal 2023 as that upgrade cycle cooled off. Macroeconomic headwinds, especially in China, exacerbated that slowdown.

In fiscal 2024, its revenue and adjusted EPS rose 9% and 21%, respectively, as the smartphone market stabilized, it expanded its automotive chip business, and the macro environment warmed up again. For fiscal 2025, analysts expect Qualcomm’s revenue and adjusted EPS to grow 11% and 14%, respectively. Based on those expectations, it looks cheap at 15 times forward earnings. It also pays a decent forward yield of 1.9%.

Cisco is one of the world’s largest networking hardware and software companies. It operates in a highly saturated market, but its scale, its diversification, and the stickiness of its ecosystem give it major advantages against its smaller competitors.

Cisco’s revenue only grew 1% in fiscal 2021 (which ended in July 2021) and 3% in fiscal 2022 as supply chain constraints curbed its sales of routers, switches, and wireless networking devices. In fiscal 2023, its revenue rose 11% as it resolved its supply chain issues and met the market’s pent-up demand for new networking hardware.

But in fiscal 2024, Cisco’s revenue and adjusted EPS declined 6% and 4%, respectively. Its growth cooled off because many of its customers had accumulated too much hardware, and the macro headwinds made it harder to deploy all those devices. However, analysts expect its revenue to grow 4% in fiscal 2025 as it laps those challenges and works through its inventory issues, even as the costs of integrating Splunk (which it acquired last March) reduce its adjusted EPS by 2%.

Cisco’s growth should accelerate as the macroeconomic environment improves, and it still looks cheap at 17 times forward earnings. It also pays an attractive forward yield of 2.6%.

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Leo Sun has positions in Apple. The Motley Fool has positions in and recommends Apple, Cisco Systems, and Qualcomm. The Motley Fool has a disclosure policy.

Have $6,000? These 3 Stocks Could Be Bargain Buys for 2025 and Beyond was originally published by The Motley Fool