J.P. Morgan is the latest Wall Street firm to recommend Cisco Systems, saying in a note on Thursday that investors trying to protect themselves from the trade war should look to the stock as a technology company with little exposure in China.
The nod from J.P. Morgan comes after Bank of America highlighted Cisco’s “relatively low exposure to China,” especially when compared to the other biggest tech stocks. Known as FAANG – Facebook, Apple, Amazon, Netflix and Google-parent Alphabet – the top tech stocks have been among the hardest hit by the heightened trade risk from China, falling 5% to 11% this month.
Cisco shares have risen 4.3% this month, by comparison. Both J.P. Morgan and Bank of America see upside in part due to Cisco’s limited exposure to China, as well as improving overall prospects. Only 3.3% of Cisco’s revenue comes from China, according to FactSet. The average revenue from China among FAANG companies is 7.5% – although that is heavily influenced by Apple and Netflix. The two tech giants respectively bring in 18.3% and 10.3% of total revenues from China.