It’s a Big Day for Cisco Stock. It Has Highest Close Since Dot-Com Bubble Burst.

Cisco stock has jumped 47% this year. (Gabriel Bouys/AFP via Getty Images)

Key Points

• Cisco Systems stock rose 0.9% to $80.25, a new record closing high for the first time since March 27, 2000.
• Shares of Cisco have increased 47% this year, marking its best year to date performance through Dec. 10 since 2009.
• Cisco is currently trading at 19 times forward earnings, significantly lower than its 96.7 times valuation in late 1999.

Cisco Systems stock was once one of the most notable victims of the dot-com bubble bursting in 2000. It’s finally bounced back.

Cisco stock rose 0.9% on Wednesday to $80.25, closing at a record high for the first time since March 27, 2000. Its previous record high was $80.06.

This new record comes as shares have jumped 36% this year and are on pace for their best year to date performance through Dec. 10 since 2009, according to Dow Jones Market Data.

Cisco—and shares of other internet companies like Amazon.com —went tumbling in 2000 as investors pulled money out of web stocks with massive valuations. The strong performance and valuations of these stocks was initially driven by excitement over the future potential of the World Wide Web.

There are some on Wall Street who are concerned that there’s currently a new bubble forming as investors continue to buy up shares of big tech companies based on excitement over the potential of AI. Those who are concerned point to rising stock prices and valuations, but a lack of returns on AI investments.

Valuations aren’t what they were just before the dot-com bubble burst, though. At the end of 1999, Cisco was trading at 96.7 times forward earnings, while Oracle was at 92.1 times, and eBay was at 351.7 times. Cisco is now trading at 19 times earnings expected over the next 12 months.

The stock has gotten a boost as shareholders point to strong demand for AI hardware. Cisco’s networking segment—which includes gear used in AI data centers—has grown as enterprise demand for AI infrastructure continues to rise.

Write to Angela Palumbo at angela.palumbo@dowjones.com