By Teresa Rivas

It took the Nasdaq Composite 15 years to recover after the dot-com bubble burst, and now one of tech's hardest-hit companies may finally surpass its 2000 high.

Cisco Systems soared some 3,800%, from $2 at the start of 1995 to more than $80 in March 2000, when the Nasdaq Composite peaked. That made it the world's most valuable company, with a market capitalization of more than half a trillion dollars.

It swiftly came back to earth, tumbling nearly 90% to a low of less than $10 in October 2002. The company wasn't an epic failure like pets.com -- it was still selling billions every year -- but investors were no longer willing to assign sky-high premiums to tech stocks anymore.

Now shares have popped 11% this year, boosted by strong earnings and hopes the company can cash in on AI. On Friday, Cisco was trading around $66.21, putting it on track for its highest close since Sept. 7, 2000 -- when it reached $66.25 -- and less than 20% away from its 2000 record.

J.P. Morgan analyst Samik Chatterjee believes the stock can reach $73, and reiterated an Overweight rating Friday.

He argues skeptics aren't giving Cisco enough credit. Most enthusiasm about AI has focused on the cloud and data centers, but physical networking hardware -- Cisco's bread and butter -- will be needed as well. That makes him confident Cisco can meet its fiscal 2026 and 2027 revenue growth targets of 4% to 6%.

Cisco's security business, which offers products covering networking, data center, cloud, and collaboration, is in the midst of a transformation, including its recent acquisition of Splunk, that could make it a leader in the space, Chatterjee argues. He believes "the combination of organic and inorganic investments makes the 15% to 17% growth target for the segment more achievable, even though still ambitious."

That much was evident at the company's recent Cisco Live 2025, where it showcased innovations and "demonstrated how Cisco is moving toward solutions where Security is embedded within the product, from networking equipment to AI management systems," Chatterjee writes.

Not all analysts are as bullish. Just over half the 25 analysts tracked by FactSet have a Buy rating or equivalent on the shares and the average target is $66. Still, the last bearish analyst threw in the towel this spring and targets range as high as $78.

Someone call Prince on a Cisco IP desk phone, because it's almost time to party like it's 1999.

Write to Teresa Rivas at teresa.rivas@barrons.com

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June 20, 2025 13:35 ET (17:35 GMT)

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