It took a quarter century, but Cisco Systems Inc. (CSCO) finally did it. The networking giant's stock closed Wednesday at $80.25, pushing past the split-adjusted record of $80.06 it hit way back on March 27, 2000. That was the same day Cisco briefly overtook Microsoft (MSFT) as the world's most valuable public company, riding high on dot-com euphoria before the whole thing came crashing down.

The Long Road Back From the Bubble

Remember when everyone thought internet routers were going to make you rich? Cisco was the poster child of that era, supplying the picks and shovels for the digital gold rush. Then the bubble popped, and the stock spent the next two decades trying to claw its way back. Now, with a market cap of $317 billion, Cisco is finally having its moment again—this time powered by artificial intelligence instead of overheated dreams about pets.com.

AI Infrastructure Drives the Turnaround

The comeback story has real substance behind it. Back in November, Cisco crushed Wall Street's expectations with first-quarter revenue hitting $14.88 billion and adjusted earnings of $1.00 per share. More importantly, the company raised its full-year guidance based on surging AI demand. That got JPMorgan's attention—the bank thinks Cisco's 2026 orders could surprise on the upside.

Here's where it gets interesting: hyperscalers (think big cloud providers building massive data centers) placed $1.3 billion in orders during Q1 alone. Cisco now expects to pull in roughly $3 billion in AI infrastructure revenue from these customers in fiscal 2026. That's not small potatoes.

Strategic Moves Beyond the Data Center

Cisco isn't putting all its chips on AI infrastructure. The company partnered with IBM (IBM) to build the foundation for networked distributed quantum computing systems targeted for the early 2030s. Whether that pans out remains to be seen, but it shows Cisco is thinking about the next big thing.

The company has also been doubling down on 5G-era security solutions, rolling out new firewall, encryption, and threat-detection technologies. All of this has translated into impressive stock performance—shares are up 35.79% year-to-date.

Mixed Signals on Valuation

It's not all sunshine and roses, though. Quality metrics place Cisco in the 50th percentile, while value rankings put it in just the 16th percentile. Translation: the stock's comeback has made it relatively expensive compared to its fundamentals. After 25 years of waiting, investors are paying up for this recovery story.

Still, after a quarter century in the wilderness, Cisco shareholders have earned the right to celebrate breaking even with their 2000 peak. The big question now is whether AI infrastructure demand has the staying power to push the stock significantly higher, or if we're looking at another temporary sugar rush that ends badly. At least this time around, the business model involves actual revenue from real customers building real AI systems. That's progress.