A 72-Year-Old Who Bought 1,000 Cisco Shares at the 2000 Peak Waited 25 Years to Break Even. Cisco Just Had Its Fastest Growth in 15 Years, and the Stock Fell 4%
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On March 27, 2000, Cisco Systems (NASDAQ: CSCO) closed at $80.06, adjusted for the split that month. It was the top of the dot-com boom. Take a woman who was 46 that day and bought 1,000 shares for $80,060. She is 72 now. Cisco did not close above her price again until Dec. 10, 2025, more than 25 years later.
On Thursday evening Cisco reported its fastest revenue growth in more than 15 years and raised its forecast for the year. The stock was at $98.30 in pre-market trading Friday as of 7:50 AM ET, down 3.6% from Thursday’s close of $102.01.
What Cisco reported
Revenue for the quarter rose 24% to $18.52 billion. Analysts polled by FactSet expected $18.12 billion. Adjusted earnings came to $1.40 a share, up 40% from a year earlier and ahead of the $1.33 analysts expected.
Cisco raised its full-year revenue forecast to $74.8 billion to $75.8 billion, from $72.2 billion to $73.4 billion. Chief financial officer Mark Patterson said the increase was $2.5 billion, with $1.5 billion of it from the giant cloud companies. Cisco now expects $9 billion this fiscal year from selling AI networking gear to those companies, up from its earlier target of $7.5 billion.
“We are in the very early stages of a multi-year networking supercycle,” chief executive Chuck Robbins said.
Why the stock fell anyway
The AI gear Cisco is selling more of keeps less profit per dollar of sales. Its adjusted gross margin fell to 65.6% from 68.1% a year earlier, and Cisco expects it to stay just under 65% for the year, partly because memory chips cost more.
Five Wall Street firms cut their price targets Friday morning. Barclays went to $109 from $123. Piper Sandler went to $112 from $125 and kept a neutral rating. Citigroup went to $120 from $139, Wells Fargo to $130 from $150, and Rosenblatt to $140 from $165.
Where her 1,000 shares stand
At $98.30, her shares are worth $98,300, or $18.24 a share more than she paid in 2000. In June, at Cisco’s record close of $130.00, the same shares were worth $130,000.
The dividends changed her math. Cisco began paying a dividend in 2011. Through its October payment it has paid $18.38 a share in total, or $18,380 on her 1,000 shares. Counting that cash, she was back to even in February 2025, about 10 months before the share price got there on its own. Her shares plus the dividends add up to $116,680, 46% more than she put in, over more than 26 years.
Had she reinvested every dividend in more Cisco shares, the $80,060 would be worth about $159,640 at Thursday’s close. The same $80,060 put into an S&P 500 index fund that day, with dividends reinvested, would be worth about $637,198.
What a retiree holding Cisco can take from this
The quarter itself was strong. Revenue and profit beat forecasts, the forecast went up, and the company returned $3.7 billion to shareholders in the quarter. The stock fell because the price already counted on a lot, and because the fastest-growing part of the business carries a lower margin.
For income, Cisco pays $0.42 a share each quarter. On 1,000 shares that is $1,680 a year, a yield of about 1.7% at $98.30.
If the shares sit in a traditional IRA, her age matters next. She turns 73 next year, the age when required minimum distributions begin for people born from 1951 through 1959. The IRS divisor at 73 is 26.5, so on an account holding only these shares at today’s price, her first required withdrawal would be about $3,709, and it is taxed as ordinary income whether she sells Cisco or not.
Say she also has $650,000 in other retirement savings. Then Cisco is 13% of her $748,300. At the June record it was 17% of $780,000. Selling 500 shares at today’s price would raise about $49,150 and bring Cisco down to about 7% of her savings, while the other 500 shares keep paying her $840 a year in dividends.
The larger lesson is the one her 25 years tell. A great company bought at a peak price can take decades to pay off, while the broad market keeps compounding. If one stock has grown into a large share of a retirement portfolio, trimming it back to a size you could hold through another long wait is a decision you can make without knowing what Cisco does next quarter. Inside an IRA that sale owes no tax. In a taxable account, the gain on shares bought in 2000 is $18.24 a share at Friday’s price.
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I've been writing about stocks and personal finance for 20+ years. I believe all great companies are tech companies in the long run, and I invest accordingly.
