Ah, this is looking just like 2000. CSCO would beat revenue guidance and beat EPS guidance by a few percent each quarter. And CSCO would do that quarter after quarter after quarter for about 12 quarters. The stock sailed higher each time, until one time the slight accounting tweaks, the deferred revenue, the investments from new shareholders, the hype, the bookings and contracts from customers no longer allowed this slight beat each quarter.
The stock price dropped from $82 per share. It dropped from $70 per share, it dropped from $50 per share, it dropped from $40 per share, it dropped from $30 per share, it dropped from $20 per share, it dropped to $10 per share. The stock was (in hindsight) clearly way overvalued. It could not regain its share price in 5 years. It could not regain its share price in 10 years. It could not regain it share price in 15 years. It has been 25 years and and Cisco still has not regained it share price of $82 per share (It is 2025 and CSCO is still below $82 per share). The growth is slowing, the retribution when a company cannot sustain the positive hype feedback loop is harsh.
This is what will likely happen to Nvidia once that manipulation, pumping and slight beat are shown to have just been producing a hugely overvalued stock price. Be careful.
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