In short: Lebenthal's final trade, riding Snipe's networking call (42:26). "This has been a winner all year and I think the last couple of months of consolidation sets it up for the next leg higher."
Cisco is the older, larger maker of networking equipment. Lebenthal's pick is partly a chart call: the stock rose all year, then went sideways for a couple of months (a "consolidation"), which he reads as a pause before the next move up, supported by the same data-center demand Snipe described.
In short: Liked on the May 2025 appearance and up 86% since; still liked. If owning your own data matters, enterprises build their own AI infrastructure and "you're going to need to upgrade your networks," and hyperscalers spreading data centers across locations must network them together — "Cisco is obviously the networking king." "Trading at a reasonable valuation… positive cash flow… high margins, things that I like." Sized as a portfolio position, not a bet.
Cisco sells the networking gear — switches and routers — that moves data between computers. Niles liked it in May 2025 and it has risen 86% since; he still likes it. His logic: if companies decide their data is too valuable to hand to someone else's AI, they'll build their own AI systems in-house, which means much more data flowing through corporate networks and a wave of network upgrades. And as local opposition pushes data centers into more scattered locations, those sites need to be wired together.
It also passes his financial screen: a reasonable valuation, positive cash flow, high profit margins. It's a steady, multi-year position rather than a high-growth bet.
58:06So you really play both sides of the market depending on what the fundamentals are. Cisco though really worked out if you hung on, up 86% since then. Do you like it today? — Yeah, I do. I think that if you look at Cisco, again it's what portion of your portfolio is it taking? If you're thinking about it from a long period of time and as it relates to AI, what does Cisco do? Well, if you believe that owning your own data is important, then that means that a lot of companies are going to want to have their own AI
In short: The episode's central historical exhibit, cited as evidence that very smart companies get it wrong — not as a view on today's Cisco. Niles: "for anybody who believes that, they should go on to Cisco's investor relations website, pull the earnings release from May of 2021… where the CEO of Cisco Systems says we've gone from 70% year-over-year bookings growth in several months to negative 30% year-over-year bookings growth — and they were at one point the most valuable company in the world." He returns to it in the buy-and-hold clip as one of the market-share leaders "that then went into trouble." Forehand: "I wish there were podcasts back in the 90s where I could have listened to the CEO of Cisco doing the same thing and I would have been like, this makes complete sense."
4:16How could they be wrong? We asked Dan that question. — Well, for anybody who believes that they should go on to Cisco's investor relations website, pull the earnings release from May of 2021, if memory serves me correctly, where the CEO of Cisco Systems says we've gone from 70% year-over-year bookings growth in several months to negative 30%.
In short: The 2000 analogue for why pauses are healthy: "Cisco had a couple of 30% selloffs on their way to being up like 4,000% from the end of 94 to its peak in March of 2000." And the homework: "go back and read the Cisco press release from May of 2001… bookings went from up 70% year-over-year to down 30% year-over-year in just several months."
7:01Cisco had a couple of 30% selloffs on their way to being up like 4,000% from the end of 94 to its peak in March of 2000. And so these pauses are healthy. And so it's good that we have in my mind this pause in data center expansion because it'll also give these companies a chance to sit down and go, well, with some of these new ways of doing things, do I really need as much square footage as I thought or was I really building because the other guy is saying they're going to spend this much and so I feel like I can't. Larry Page had this saying, I'd
In short: The historical control for the whole episode, not a stock view. "Cisco… was sort of the Nvidia of its day, it was trading at a PE valuation of over a 100 times of earnings"; it "used to be the most valuable company in the world, just recently got back above its market cap from 2000"; and his smart-money antidote is to pull its own earnings release where "the CEO of Cisco Systems says we've gone from 70% year-over-year bookings growth in several months to negative 30%." Also on his buy-and-hold casualty list.
Cisco makes the networking equipment that carries internet traffic, and in this conversation it is the control experiment rather than an investment idea. In 2000 it was the most valuable company in the world at over 100 times earnings — "sort of the Nvidia of its day."
Two facts do all the work. First, it only "recently got back above its market cap from 2000" — a twenty-five-year round trip for shareholders in a company whose products never stopped being needed. Second, and this is the piece of homework he actually recommends: pull Cisco's own earnings release from the collapse, where the CEO reports going "from 70% year-over-year bookings growth in several months to negative 30%."
The purpose is to inoculate against the argument that today's spending must be sound because very smart people are doing it. Cisco's management were smart, its market was real, and the demand still fell off a cliff with almost no warning. Which is why Niles refuses to lean on management's own long-term guidance — including Nvidia's new multi-year forecast.
25:32But you kind of have to take a step back and say, in the late '90s, those people were incredibly smart that were running those companies and they were throwing the money for a reason. So I sometimes have to check myself and think that through. — Well, for anybody who believes that, they should go on to Cisco's investor relations website, pull the earnings release from May of 2021, if memory serves me correctly, where the CEO of Cisco Systems says we've gone from 70% year-over-year bookings growth in several months to negative 30%
In short: Harrington's own long-time holding, used here as the worked example of why good earnings stopped producing gains — a marked change of tone from her outright bullish framing on 2026-AUG-21. "You and I were talking about this a couple weeks ago… you're like, well, if it's had such great earnings, why isn't it still flying? And I'm like, it's already up 50% on the year. It's already trading at 25 times earnings. That's richer than it's ever been. I think we're just at a pause and a consolidation." Not a sell — an explanation.
Cisco is Harrington's own long-standing holding, and here she uses it against herself. Ten days earlier she was making the bull case; today it is her worked example of why good news stopped producing gains.
The stock is up 50% on the year and trades at 25 times earnings — "richer than it's ever been." When a company's results are excellent but the price already assumes excellence, the shares can stall for months without anything being wrong. That, in her telling, is what is happening to the whole AI complex — not a political attack, just a market that already paid for the good news.
In short: Harrington's cleanest single-name thesis of the show, and it is deliberately model-agnostic: "what I love about Cisco is that it doesn't matter who wins. It doesn't matter if Claude wins. It doesn't matter if ChatGPT wins, Gemini. It doesn't matter if Microsoft does well, Meta does well, or Apple does well. Our bet on Cisco is simply that as the AI trade makes the technology world bigger and more complex and people need more and more technology in their housing and businesses, Cisco wins. They're the infrastructure behind all of that." The financial leg: "they still have a 5% free cash flow yield, so it's still enormously profitable, whereas a lot of the other guys have given up their free cash flow." On the stock being flat since May: "it's up 48% year to date… it's flat since May because it ran up so much. Trades at 25 times earnings, a little premium to the market where it used to trade at a discount." Also on Evercore's top-six tech-hardware list for the second half.
Cisco makes the switches, routers and networking gear that connect computers to each other. Jenny Harrington's reason for owning it is that she does not have to predict which AI company wins — not Claude, not ChatGPT, not Gemini, not Microsoft, Meta or Apple. Whichever of them succeeds, the amount of computing being connected grows, and Cisco supplies the plumbing underneath all of it.
The financial support for that is a free cash flow yield of about 5% — meaning the cash the business actually generates each year equals roughly a twentieth of the share price. She contrasts that with the AI leaders that are currently spending their cash flow away on construction. Cisco is profitable now, not later.
On price: the stock is up 48% this year and has gone sideways since May simply because it ran so far so fast. It trades at about 25 times earnings — a slight premium to the market, where it historically traded at a discount. That is the one thing to watch: the discount that made it cheap has already closed.
In short: Named as part of the AI-networking cohort in Terranova's defence of his Arista core position: Arista "is participating in AI networking along with Cisco and Ciena." Peer-set context, no stance on Cisco itself.
In short: The template for what he expects from AI, not a stance on the stock: "a good example of that was Cisco back in late '99, early 2000. They thought everybody was going to buy these routers and the whole world was going to change… all that stuff got overbuilt and so you looked up in 2002 and all of a sudden… it's not happening like we thought."
This isn't a view on Cisco today; it's the historical template Oakley uses to judge the AI build-out. In 1999–2000 the market decided the internet would require limitless routers and fibre, Cisco's shares priced in that future, and enormous capacity was laid in the ground. By 2002 it was obvious the capacity had overshot actual demand — even though the internet itself turned out to be every bit as important as promised.
His argument is that AI data centres are in the same position: the technology will matter, possibly more than the internet did, "but it ended up in different ways, not what everybody thought it was in '98 and '99." That gap between a correct thesis and a wrong set of winners is why he refuses to own the trade at all.
10:53I don't think those earnings will hold up. In other words, I don't think what you look at 24 months from now will be the same as it is today. And a good example of that was Cisco back in late '99, early 2000. They thought everybody was going to buy these routers and the whole world was going to change and you had everybody talking about putting so much fiber in the ground and that sort of thing.
In short: Historical reference only. Verrone: "go back to '99 or 2000. If I told you the leading stocks, Cisco or Sun Micro, were going to be down 40 or 50% over an 8-week period, what do you think the S&P or the Nasdaq would be down? A lot." The point is about 2026's resilience, not about Cisco.
7:37That's the point at which you have the most risk. The fact that we're dealing with this, I think speaks to Chris's point about the internal strength of the market. And Steve, what you had just said, go back to '99 or 2000. If I told you the leading stocks, Cisco or Sun Micro, were going to be down 40 or 50% over an 8-week period, what do you think the S&P or the Nasdaq would be down? A lot.
In short: Exhibit A that the AI-infrastructure rebound has run its course: negative reactions to beat-and-raise results on both revenue and EPS, with Cisco down 8% for the week despite being up 45% year to date — "the biggest problem was arguably their recent bounce from July to the first week of August of 8%." Deck page 17.
Full passage: premium transcript (PDF).
In short: Networking supercycle. Q4 revenue +18% Y/Y to a record $17.3B ($0.4B beat), adjusted EPS $1.22 ($0.05 beat). Product orders grew 35%, or 25% excluding hyperscalers — the acceleration "extends well beyond AI data centers" — and networking revenue jumped 28%. Cisco booked $4B of hyperscaler AI orders in Q4, taking FY26 orders to $9.3B versus the ~$9B target, with ~$4B converted to revenue and $7.5B of AI infrastructure revenue expected in FY27 — yet the stock fell ~4% "as investors questioned why that revenue target was not higher given the backlog." FY27 guidance of $72.2–$73.4B implies ~15% growth and sits well above consensus; Q1 guidance of $18.0–$18.2B was more than $1B ahead. Gross margin is the trade-off, −2pp Y/Y to 66% on hardware mix and memory costs. Bottom Line: "The debate now shifts from AI demand to conversion."
Cisco makes the switches and routers that move data around inside networks — the plumbing of the internet and of every corporate data centre. The AI boom needs enormous amounts of that plumbing, and this quarter Cisco booked $4 billion of AI orders from the big cloud companies alone, taking its full-year AI orders to $9.3 billion against a roughly $9 billion target.
The most interesting number is a subtraction. Total product orders grew 35% — but 25% even if you strip out the hyperscalers entirely. That says ordinary enterprises are upgrading their networks too, in preparation for AI, so this is a broad refresh cycle rather than a handful of giant cloud contracts.
The stock still fell about 4%, because Cisco only guided $7.5 billion of AI revenue for next year and investors thought that looked small against the order book. That is the tell App Economy points at: the argument has moved on from "is the demand real" to "how fast can Cisco convert orders into revenue without the hardware-heavy mix eating its margins" — gross margin already slipped two points to 66% on memory costs.
In short: "Like its competitor Arista, Cisco is a big beneficiary of AI data centers." EPS $1.22, +23% versus last year, and the company raised both EPS and revenue guidance — "again, not a surprise, but the stock was down after hours as the guidance did not meet the whisper numbers."
Cisco makes the networking gear that connects the machines inside data centres, so it benefits from the AI build-out much like Arista does. The results were good: earnings per share of $1.22, up 23%, with both revenue and profit guidance raised.
The stock still fell after hours — because it missed the "whisper number," the unofficial and higher expectation traders actually hold, as opposed to the published analyst estimate. It's a useful reminder that in a hot theme the bar a stock must clear is not the one printed on the research report.
15:47EPS was a$122 up 23% versus last year. The company raised both EPS and revenue guidance. Again, not a surprise, but the stock was down after hours as the guidance did not meet the whisper numbers. Moving on, I want to talk about upstarts and established franchises and who wins and who loses and why. One way to frame the last few decades and AI is the transition of all industries from analog to digital.
In short: A named survivor — fifteenth at $105.17bn in 2005, nineteenth at $477.33bn in 2026. Structural reference; no view.
In short: The historical tell, not a rating: at the March-2000 NASDAQ peak "it was companies like Cisco reporting great earnings and the stocks went down" — exactly what Google just did, so "maybe this is the big shakeout we've been looking for with tech."
24:02I mean look what's happened to SpaceX. My goodness, that's just and even Google today reported good earnings and the stock is getting a whack. I think that's what happened in the late 90s early 2000. I think it was March of 2000 when the NASDAQ peaked and it was companies like Cisco reporting great earnings and the stocks went down.
In short: Same tech-equipment beneficiary framing as Arista — a place for AI bulls to focus that doesn't carry hyperscaler capital intensity.
Cisco is the long-established maker of networking and data-center equipment. Eisman groups it with Arista as a "tech equipment" beneficiary of AI build-out — a way to play rising AI demand without owning the capital-hungry hyperscalers. Same caveat applies: the rotation thesis depends on AI spending holding up.
11:04Communities are starting to push back. I'm getting the impression that the level of AI data center construction is slower than the bulls are hoping for. This risk bears tracking. The AI story has definitely changed because of the capital intensity. That's what's new. That means I believe that for investors who remain bullish, they may shy away from the capital intensive hyperscalers and focus more on power generation, semiconductors, and tech equipment companies like Arista and Cisco.
In short: Named as "Arista's main competitor" and the source of the share Arista is taking: "Arista outperforms Cisco with simpler, more reliable software that make updates and automation easier. Once a customer starts using Arista's products, they almost never switch." Also the CEO's former employer. No independent view.
In short: The eighth quality-fund add. Reported without analysis.
In short: Bill — dot-com analogy. Hit a ~$600B cap in early 2000; only "recently" passed that number while being 12x the company it was then — the point isn't whether the business survives, it's that too many fools chased the price.
24:57time. Three months later, like clockwork, Cisco uh had had uh reported earnings and and they soared to a $600 billion market cap. Cisco just passed that number recently and they're like 12 times as big a company as they were then. Yeah. Okay. See, the problem isn't whether the underlying business uh uh survives and is important.
Nothing matches this filter.
Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.