Cisco $CSCO ( ▲ 2.6% ) just did something it has not done since the prime AOL and dial up era. The company closed at a record high on Wednesday, finally surpassing the dot com bubble peak that once made it the most valuable company on the planet. Even with a pullback on Thursday, the stock is still up more than 30 percent this year as Cisco leans harder into the AI data center boom. It recently unveiled new data center switches built with Nvidia and joined a data center venture with AMD and Saudi Arabia backed AI firm Humain.
The moment links two eras of tech mania almost perfectly. In the late 1990s, Cisco was the backbone of the internet buildout. Its routers and switches, the plumbing that let computers talk to each other, powered a frenzy of investment and acquisitions. From 1995 to 2000, revenue grew nearly 60 percent per year. The stock rose roughly 4,000 percent. At its 2000 peak above 550 billion dollars, Cisco briefly passed Microsoft and General Electric to become the world’s most valuable company. Analysts even predicted it could become the first trillion dollar company.
Then the music stopped. The internet investment wave slowed sharply in 2000 and 2001 and Cisco’s sales contracted for two straight years. The stock fell nearly 90 percent and the company cut 40,000 workers. That long slide explains why it took until this week for the closing price to reclaim its dot com peak of 80.06 dollars.
Even now, Cisco’s market cap is far below its former glory. The company has repurchased so many shares over the years that its total market value is still about 250 billion dollars under its 2000 peak, even though the stock price is similar. In other words, individual holders who stayed in since the late 1990s are back to break even, but the company as a whole is still much smaller.
Cisco’s long climb back illustrates how hard it is to judge the true top of a boom while you are living inside it. Investors today often draw parallels to Nvidia, which sits at the center of the AI explosion the same way Cisco did for the internet revolution. Cisco’s story shows how powerful a wave like that can be and how tough it can be to return to peak territory once the wave recedes.