A signal that unsettles veteran traders: Cisco returns to the peak after 25 years

Cisco, Intel, Qualcomm, Texas Instruments—these star stocks from the dot-com bubble era are making a comeback into the market after more than a quarter-century of silence, in ways that are unsettling to older traders.

Last Thursday, Cisco’s stock surged double digits after releasing its latest earnings report, hitting a new all-time closing high. It had last touched a record high over 25 years ago. Meanwhile, Intel, Qualcomm, and Texas Instruments also set new records in succession. This scene is sparking renewed discussions about a replay of the internet bubble and causing concern among seasoned traders who experienced that period firsthand.

The current strong rally in semiconductor stocks has pushed the Philadelphia Semiconductor Index (SOX) into a territory widely considered “extremely overbought” by technical analysts, at the same time, Goldman Sachs hedge fund chief Tony Pasquariello admitted that the current trading environment’s excitement is “almost intoxicating,” and said he has been comparing the current market to the late 1990s for an entire week. The “Big Short” prototype Michael Burry directly wrote on social media that the market “feels like the last few months of the 1999-2000 bubble.”**

Old faces return to the peak, and historical parallels raise alarms

Cisco was once the most valuable company in the world during the peak of the internet bubble. However, since hitting its all-time closing high on March 27, 2000, the stock only surpassed that record again on December 10 last year—more than 25 years later. Intel’s situation is similar; according to Dow Jones market data, it only exceeded its 2000 August 31 high this April 24, when Intel was the second-largest company in the U.S. by market cap.

“Now, the big winners are Qualcomm, Intel, and Cisco, which is indeed a chilling coincidence,” said Steve Sosnick, Chief Strategist at Interactive Brokers. During the internet bubble era, Sosnick was a market maker in options at Timber Hill, the predecessor of Interactive Brokers.

Brent Donnelly, President of Spectra Markets, was a day trader back then. He said, “Seeing Cisco and Intel back at the top is truly unbelievable. These two stocks just broke through their 2000 highs.”

Semiconductor index deviation from the moving average hits highest since 2000

Technical data further intensifies market caution. According to MarketWatch analysis based on FactSet data, earlier this week, SOX was once 63.8% above its 200-day moving average— the largest deviation since the early days of the 2000 internet bubble burst. In comparison, on March 10, 2000, at the bubble’s peak, SOX was 111.2% above its 200-day moving average.

Meanwhile, Bespoke Investment Group has been tracking the Nasdaq Composite’s performance since the release of ChatGPT, comparing it to the market after Netscape’s IPO—widely regarded as the start of the internet era. The similarity in the two historical trajectories is almost uncanny. Based on this comparison, the current cycle position of the Nasdaq is roughly equivalent to late May 1998.

Bubble debate: differences between then and now

Although the parallels have sparked widespread discussion, many market participants point out that there are significant differences between today and the internet bubble era.

The most direct difference lies in valuation. FactSet data shows that the current expected P/E ratio of SOX is 27.7, compared to 52.1 at the bubble’s peak in 2000. Sosnick notes that the current rally is accompanied by substantial improvements in earnings expectations, and this earnings season has been one of the strongest in years, with valuations not reaching the extremes seen during the internet bubble.

Donnelly also pointed out that the U.S. government recently took a stake in Intel, and geopolitical factors affecting tech stocks are far more complex than in the past. Additionally, he believes that retail investors’ strategies today are more mature than during the internet bubble—when, in April 2025, they bought the dip during a major market correction rather than chasing highs.

The bears, however, cite more direct historical analogies. Some analysts list three “fatal signals” from the 2000 bubble: Cisco with a P/E of 196 being touted as a “buy forever”; companies raising hundreds of millions based solely on user growth and stories; retail investors rushing into a handful of star stocks until the Fed tightens liquidity. They believe these three signals are all present again in 2026.

Even if it’s a bubble, exiting isn’t easy

Kimberly Caughey Forrest, founder and CIO of Bokeh Capital Partners, experienced the entire internet bubble firsthand—she joined as a stock research analyst in October 1999, right at the tail end of that bull market. She believes the bubble’s end was rooted in the market’s mistaken assumption that telecom and hardware spending would continue to grow at the initial build-out pace, which proved false.

In the current AI infrastructure cycle, Forrest notes that most spending is concentrated among a few giants competing for AI leadership. “When one pulls back, will the others stop investing?” she asks. “We’ll see.”

Craig Johnson, Chief Market Technician at Piper Sandler, holds a relatively optimistic view. He compares the current AI infrastructure buildout to the transition from dial-up internet to fiber-optic broadband, believing “we are entering the next phase of faster communication, a new upgrade cycle.”

However, even if investors are convinced we’re in a bubble, acting on that conviction isn’t straightforward. Donnelly points out that any investor who exited in 1999 might have missed the parabolic rise of the Nasdaq in the final stages of the bubble. “It’s very hard to act because even if we’re in the last wave of the bubble, there could still be significant gains,” he said.

Risk warning and disclaimer

        The market carries risks; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Invest accordingly at their own risk.