Cisco reached a significant milestone on Wednesday, achieving a stock price not seen since the early 2000s, a period characterized by the intense excitement surrounding the internet boom.
The company's stock surged by 1% to $80.25, surpassing its previous split-adjusted record of $80.06. This record was last set on March 27, 2000, a day that also saw Cisco briefly overtake Microsoft to become the world's most valuable publicly traded company, marking the zenith of internet mania.
During that era, investors seeking exposure to the burgeoning web industry invariably turned to Cisco's switches and routers, essential tools for anyone wanting to connect online. However, the landscape shifted rapidly as the dot-com bubble burst, leading to a dramatic decline in the Nasdaq's value, with more than three-quarters of its worth lost by October 2002.
While the collapse led to the downfall of numerous high-profile companies, Cisco navigated the turmoil and continued to evolve. The company strategically expanded its portfolio, acquiring Scientific-Atlanta in 2006 and subsequently venturing deeper into software with acquisitions such as Webex, AppDynamics, Duo, and Splunk. These moves allowed Cisco to enter new markets as the initial hype surrounding the internet began to fade, demonstrating its adaptability and resilience amidst a changing market environment.
Cisco's Strategic Pivot into AI Infrastructure
The recent surge in Cisco's stock has propelled its market capitalization to $317 billion, positioning it as the thirteenth largest U.S. tech company. While this valuation places it below the megacap tech giants driving the current wave of AI enthusiasm, Cisco is making significant inroads into the AI sector.
Analysts observe parallels between the current AI boom and the energy of the dot-com era, with Nvidia emerging as a key beneficiary due to its powerful chips that underpin major AI models. These chips are integral to the data centers operated by leading tech companies, contributing to Nvidia's substantial market value of approximately $4.5 trillion, which is roughly fourteen times that of Cisco.
Despite this valuation gap, Cisco is actively participating in the AI build-out. In November, CEO Chuck Robbins announced that the company secured $1.3 billion in quarterly AI infrastructure orders from major web-scale customers. Cisco reported revenues close to $15 billion for the period, marking a 7.5% increase year-over-year.
While this growth rate is considerably lower than the 66% pace recorded in 2000, the increasing demand for AI-related hardware has fueled a roughly 36% rise in Cisco's stock year-to-date in 2025. In comparison, the Nasdaq has seen a gain of around 22% over the same period.
David Vogt, an analyst at UBS, highlighted the robust demand for AI infrastructure when he upgraded Cisco's stock last month, preceding the fiscal first-quarter earnings report. He noted that the order flow indicates strong interest from companies actively developing AI systems.
However, a segment of Wall Street remains cautious about the sustainability of the current spending spree in the AI sector. Concerns have been raised regarding the rapid cash burn within the sector and questions about the appropriate application of accounting rules as companies accelerate their AI project investments.