Chuck Robbins, chief executive officer of Cisco, participates in a Bloomberg interview at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2024.
Stefan Wermuth | Bloomberg | Getty Images
Few companies were as hot in early 2000 as Cisco, whose networking equipment served as the backbone of the internet boom.
On Wednesday, Cisco’s stock surpassed its dot‑com peak for the first time. The shares rose almost 1% to $80.25, topping the prior split‑adjusted record of $80.06 set on March 27, 2000. That same day Cisco overtook Microsoft to become the most valuable publicly traded company in the world.
Back then, investors saw Cisco as a way to bet on the growth of the web, as companies that wanted to get online relied on the hardware maker’s switches and routers. The dot‑com bubble burst shortly after Cisco hit its zenith, wiping out more than three‑quarters of the Nasdaq’s value by October 2002.
While many internet high‑flyers vanished, Cisco survived the turmoil. The company subsequently broadened its portfolio through a series of strategic acquisitions—starting with set‑top box maker Scientific‑Atlanta in 2006, followed by software businesses such as Webex, AppDynamics, Duo and, most recently, Splunk.
With Wednesday’s gains, Cisco’s market capitalisation sits at roughly $317 billion, placing it 13th among U.S. tech giants. In recent years the stock has lagged the mega‑caps that dominate today’s artificial‑intelligence‑driven rally.
The AI market has reached a level of euphoria that many analysts compare to the dot‑com era. The current infrastructure leader is Nvidia, whose AI‑optimized GPUs power the training of large models and underpin the data centers of the other major tech firms. Nvidia’s market capitalisation exceeds $4.5 trillion—about 14 times Cisco’s valuation.
Nevertheless, Cisco is positioning itself to capture a share of the AI wave. In November, CEO Chuck Robbins highlighted $1.3 billion in quarterly AI‑infrastructure orders from large web companies, pushing total revenue toward $15 billion—a 7.5% year‑over‑year increase. For context, Cisco’s revenue grew 66% in the same quarter of 2000, underscoring how growth expectations have shifted from pure hardware volume to high‑margin software and services.
Key to Cisco’s AI ambition is its pivot toward hybrid‑cloud networking, security, and observability solutions that enable hyperscale operators to run AI workloads at scale. The company’s acquisition of Splunk adds real‑time data analytics capabilities, while Duo and AppDynamics deepen its security and performance‑monitoring stack—critical components for AI‑centric data‑center architectures.
Analysts note several headwinds. First, the competitive landscape is intensifying as cloud providers develop proprietary silicon and networking solutions that could bypass Cisco’s traditional equipment. Second, margin compression remains a risk; hardware historically yields lower margins than software, and Cisco must continue to scale its recurring‑revenue streams to offset this pressure.
Despite these challenges, Cisco’s shares have risen about 36% so far in 2025, outpacing the Nasdaq’s 22% gain over the same period. The stock’s outperformance reflects investor optimism that Cisco’s diversified, software‑heavy portfolio can deliver sustainable growth in an AI‑focused economy.
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