Why Cisco’s comeback to an all-time high should interest you

Cisco was among the icons of the dot-com bubble. In 2000, it was among the most valuable companies in the world. The subsequent crash taught markets a hard lesson. Current move to an all-time high is not just nostalgia. It points to a shift in demand for networking hardware. This hardware supports data centers and the infrastructure needed for artificial intelligence. According to official data, in recent quarters the company not only increased revenue, but also revised its outlook for fiscal year 2026 upward. That gave the market greater confidence in more sustainable growth.

The stocks’ growth in 2025 was significant. The previous bottom is already behind the company. Cisco is experiencing a year in which it strengthened its position among technology suppliers for modern data centers. This move is part of a broader trend. Technology companies that benefit from rising spending on AI infrastructure are getting more investor attention. That does not rule out short-term swings in the markets. But it changes the way markets value even older technology names.

AI-hype vs. real demand

According to Reuters, Cisco strengthened its revenue and profit forecasts for the upcoming fiscal year. It expects, in fiscal year 2026, revenue of 3 billion dollars from artificial intelligence infrastructure from hyperscalers, CEO Chuck Robbins said. Overall, Cisco expects fiscal year 2026 revenue to reach 60.2 to 61 billion USD, compared with the previous estimate of 59 to 60 billion USD. It expects annual adjusted earnings per share of 4.08 to 4.14 USD, compared with the previous estimate of 4.00 to 4.06 USD. This suggests that customers are increasing orders. These are mainly large cloud companies and data-center operators. They are replacing old infrastructure with more powerful solutions. That directly supports revenue and creates a real foundation for the share-price increase.

However, it is still important to distinguish between real demand for infrastructure and general AI hype. The latter has inflated valuations at some semiconductor companies, for example. Cisco is now trading at a more moderate earnings multiple than in 2000. Growth in both revenue and profits is supported by specific orders and product successes. That provides a different kind of certainty. It also means that the company should be evaluated by fundamentals, not just by market mood.

Valuation, risks, and the shadow of the dot-com bubble

The return to an all-time high is impressive. But we should take a lesson from the past. In 2000, Cisco’s valuation was extremely inflated by euphoria around internet companies. Today’s price no longer reflects such an extreme. Companies today face a stricter assessment that relies more on earnings and cash-flow. That does not mean the investment is risk-free. Among the main risks is a cooling of capital spending by large customers. Geopolitical disruptions to supply chains are also a risk. Another risk is macroeconomic shocks. These can reduce companies’ willingness to invest in technology infrastructure.

A comparison of the current P/E and EV/sales multiples with historical extremes suggests that Cisco stands on a firmer foundation. However, market sentiment can be sensitive. When things overheat, a cooldown comes quickly. Investors should therefore consider what-if scenarios too. They should also count on possible volatility.

Conclusion

Cisco’s record stock close after more than 25 years is a significant moment. It is a symbol that the company managed to adjust its offering and win back investor confidence in the AI era. This success should be read realistically. Behind the rise are real orders for networking equipment and improved revenue guidance. It is not just a return of memories of old times. Investors can appreciate the signals of growth. However, they should also consider the risks linked to the cyclicality of capital spending and to broader market sentiment. If Cisco turns the current opportunity into lasting growth in earnings and cash flow, current records may be the beginning of a new chapter.