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Cisco (CSCO) Expands Tie-Up With GDIT to Offer 5G Solutions

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Cisco (CSCO - Free Report) recently announced expansion of its business partnership with General Dynamics Information Technology (GDIT), a business unit of General Dynamics (GD - Free Report) .

The two companies will collaborate to deliver Cisco Private 5G services to various government enterprises for IoT and edge use cases.

Cisco is a well-known player in the networking space, and the company’s Private 5G solutions are built on its mobile core technology and IoT portfolio comprising IoT sensors and gateways, device management software, as well as monitoring tools and dashboards.

The company is actively investing in building its portfolio to support edge use cases like smart utility grids, safety monitoring oil rigs, streaming video optimization and drone-enabled crop management.

As such, in order to reach more customers, the company is strategically building its partnerships. Cisco and GDIT are expanding their 30+ year partnership to address the rising demand for IoT and edge use cases in different government organizations.

GDIT has been providing IT solutions to Federal, State and Local governments for more than three decades, and Cisco is looking to leverage GDIT’s connections and expertise to gain various government organizations as potential customers.

Cisco 5G Solutions Riding the Fourth Industrial Revolution

Cisco’s shares have been negatively impacted by the COVID-related lockdowns in China, which began in late March. The lockdowns resulted in a severe shortage of certain components that hurt Cisco’s ability to ship products to customers, thus hindering the top-line growth in the last reported quarter.

The company has lowered its revenue guidance for the ongoing quarter amid such macro-economic volatility. However, Cisco’s shares were impacted the most by the Russia-Ukraine war, which has put various business enterprises in the crosshairs of geopolitical tension.

Tech has been one of the sectors impacted the most by the recent geopolitical tensions. This is quite evident from Cisco and its industry peers’, Arista Networks (ANET - Free Report) and Juniper Networks (JNPR - Free Report) , poor price performance in the year-to-date period.

Shares of Cisco have tumbled 32.4% in the year-to-date period compared with the Zacks Computer - Networking industry’s decline of 32.3%.

Arista shares have slumped 34% in the year-to-date period compared with the Zacks Communication – Components industry’s decline of 25.1%.

Juniper shares have fallen 19.4% in the year-to-period compared with the Zacks Wireless Equipment industry’s decline of 26.9%.

However, despite the economic volatility, Cisco is hopeful about its future growth prospects as the company is trying to ride the fourth industrial revolution. The fourth industrial revolution is data driven and a primary reason behind the rise of IoT.

Various enterprises are investing heavily to rapidly digitize their organizations, reflecting the shift to IoT, AI and machine learning. As such, 5G networking solutions have become an extremely important part of achieving these goals, and Cisco’s recent partnership with GDIT positions it well to benefit from the changing dynamics.

Cisco recently launched new products and solutions in its Routed Optical Networking solution business to aid customers in saving up to 45% in power and 70% in real estate space for equipment and reducing carbon emission.

The company, with its recent product launches, is trying to address what the global economy needs right now, which in turn will drive the stock in the long run.

Cisco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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