Cisco Stock Enters Uncharted Territory After Two-Decade Breakthrough

Cisco Systems, Inc. has achieved a landmark financial milestone, with its share price finally revisiting the peaks last seen during the height of the dot-com bubble in the year 2000. This resurgence, however, is built upon a fundamentally different foundation than the speculative frenzy that characterized the earlier era.

The current rally stands in stark contrast to the market conditions of a quarter-century ago. Back then, Cisco's equity was trading at a price-to-earnings multiple exceeding 130, a clear indicator of investor mania. Today, the valuation presents a more sober picture, at under 19 times forward earnings. This reset underscores a pivotal shift: the present advance is being fueled by genuine profit growth and concrete demand for artificial intelligence infrastructure, rather than unfounded speculation.

The company's strategic pivot is paying dividends. Cisco has successfully realigned its business model to establish itself as a core enabler of the AI revolution—a transition validated by its latest quarterly earnings report. The networking leader outperformed Wall Street's expectations, posting earnings per share of $1.00 and a 7.5% year-over-year revenue increase to $14.88 billion.

Revised Guidance and Divergent Capital Flows

Management's confidence is reflected in an upward revision of its annual forecast. For the fiscal year ending July 31, 2026, Cisco now anticipates revenue reaching up to $61 billion, approximately $1 billion above prior analyst consensus. Ahead of the earnings release, UBS upgraded its rating on the stock to "Buy," citing robust demand for AI solutions as a primary growth catalyst.

Should investors sell immediately? Or is it worth buying Cisco?

An analysis of capital flows surrounding the equity reveals a more nuanced story. While institutional investors are demonstrating conviction in the longevity of the AI investment cycle—with firms like Advisory Services Network LLC expanding their holdings—corporate insiders have been capitalizing on the multi-year highs to realize gains. Over the past 90 days, insiders, including CEO Charles Robbins, have sold shares worth approximately $79.5 million.

Navigating a New Chapter

From a technical analysis perspective, the breach above the $80 level marks an entry into uncharted price territory for Cisco shares. The combination of strong quarterly results, raised guidance, and substantial institutional interest provides solid support for a bullish outlook. However, the scale of insider selling activity remains a notable counter-indicator for market observers to monitor.

Beyond potential capital appreciation, the stock offers investors a stable dividend, currently yielding around 2.1%. By lifting its revenue forecast, Cisco demonstrates that its underlying business fundamentals now justify its historic share price level. The coming quarters will be critical in determining whether the momentum from its AI-driven business can be sustained, potentially paving the way for further record-breaking performance.