by Keith Cowing, February 4, 2009

Cisco's quarterly earnings will be released at 4:00pm today. For better or worse, tech stocks may swing sharply based on Chambers' outlook for the quarter and the rest of 2009. The street has average EPS guidance of $0.28 per share, but what really matters is the forecast for the year. With a heavy hand in all things digital, Cisco is seen as a major prognosticator.

Look for some thoughts on cloud computing and virtualization. Cisco has made some serious moves recently, including a great partnership with VMWare. I don't know if their movement into the margin-pressure business of selling blade servers will help. That's a tough world and Cisco would be competing with its own partners, such as Dell and HP. But entering the datacenter cloud is a sharp move. For a giant company, Cisco always proves to be nimble and innovative. Cisco was a major survivor during the first dot-com crash and I have faith that they will make it through this recession stronger than ever. However, let the markets have mercy on tech stocks if Chambers says that IT spending will be down for the entire year.

Here are three reasons to be bullish on Cisco (and to buy if the stock drops during early trading tomorrow). If the stock is flat or up I'd say it's a good hold, but I'm not one to try to call the bottom here.

Cloud Computing and Virtualization: Revolution or overhyped buzz words, call it what you want - it's here and Cisco is in the game. Web hosting and startup business models are moving this way (along with some major enterprise technology environments). This will be an important growth area for Cisco.

TelePresence: Cisco has some incredible TelePresence services now. With corporate jets popping up on eBay, travel budgets tightening, and global workforces remaining a strong reality, Cisco has a major selling point here. Wall Street executives may lose their bonuses and jets, but they still want to make eye contact with their business partners around the world. Cisco will let them do it for less. Sold.

HD Streaming Movies: A major driver for Cisco's core product line is Internet video. YouTube is wonderful for people selling networking gear. But when NetFlix, Hulu, and others start streaming lots of HD movies, the networks will feel it and Cisco will be there to help in a major way. Long live high def video. Tags: Cisco, Markets, VMWare, Cloud Computing, Virtualization, TelePresence,

Tags: Cisco, Markets, VMWare, Cloud Computing, Virtualization, TelePresence,

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