Ken Fisher Added to Cisco and Palo Alto Networks. Their AI Security Bets Face Different Tests

Ken Fisher's recent portfolio additions feature two distinct strategies within AI infrastructure and security. Cisco Systems (CSCO) and Palo Alto Networks (PANW) represent two different approaches. Cisco integrates networking equipment with security software, while Palo Alto focuses on security platforms, with acquisitions adding integration complexity.

SEC filings reveal Fisher's increased holdings. From Q1 to Q2 2026, 97 Palo Alto holders rose to 89, and 101 Cisco holders increased to 103. However, these changes do not necessarily indicate current accumulation. Fisher Asset Management's SEC filings show Cisco shares grew from 17.3 million to 33.4 million, and Palo Alto shares expanded from 256,661 to 5.76 million.

Cisco's August performance indicates its diverse opportunities. Q4 networking revenue climbed 28% to about $9.8 billion, while security revenue grew 14% to roughly $2.2 billion. Total operating cash flow reached $5.4 billion. This mix suggests multiple avenues for infrastructure budget expansion. Networking benefits from increased computing connections, while security addresses the resulting protection needs. Yet, robust equipment spending may not guarantee sustained security growth or platform improvements.

Palo Alto's September results show a different pattern. Q4 revenue rose 34% to $3.41 billion, and next-generation security annual recurring revenue hit $9.10 billion. The company generated approximately $1.36 billion in operating cash flow. However, a $282 million GAAP net loss, due to a fair-value charge from acquired convertible notes, must be considered carefully.

Acquisition-driven growth should not be mistaken for organic demand growth. As of August 14, Cisco's short interest was 1.50% of its float, and Palo Alto's was 2.79%. These figures do not predict how investors will react to future results.

Cisco must transform its broader infrastructure potential into lasting growth across networking and security sectors. Palo Alto must integrate expanding platforms with successful performance and improve profitability. While Fisher's positions highlight the potential of CSCO and PANW, the report suggests exploring other AI stocks with greater upside potential and lower risk.