Just days before Nvidia stormed past $4 trillion market cap, setting off another frenzied rally around artificial intelligence (AI)-linked stocks, a quieter, less meme-able tech giant, Cisco Systems, was building a case for relevance, led by its top brass, Chuck Robbins and Jeetu Patel, in the heart of Mumbai. Long seen as a legacy stalwart of the dotcom era, Cisco today trades at a market cap of $272 billion, a far cry from its 2000 peak of $500 billion. But for its CEO Chuck Robbins and president and chief product officer Jeetu Patel, the story has only begun to play out now.

“I think we’re in the best shape we’ve been in over a decade,” Robbins said bluntly, during a recent conversation with the media at Cisco’s office in Bandra-Kurla Complex, one of Mumbai’s premier central business districts. “Our portfolio is stronger than it’s ever been,” said Robbins.

It’s a bold claim, especially for firm better known more for networking boxes and M&A sprees than for cutting-edge innovation. Yet Cisco, now in its 40th year, believes it has rediscovered its rhythm and relevance in the AI era.

Blast from the past

At the peak of the dotcom bubble in March 2000, Cisco briefly became the world’s most valuable company, touching a staggering $500 billion in market cap as its share price raced away to its lifetime high of $80. But the crash that followed relegated it to the sidelines of the Big Tech narrative, and till date its share price is still way below at $68 levels. Cisco faded into the background—profitable and powerful—but not sexy enough for Wall Street as Apple, Google, Amazon, Microsoft and the likes caught the fancy of investors.

“Where we are now, an AI first company. I would not have intellectually, honestly, been able to tell you that two years ago,” Patel, who joined the company in 2020, tells Fortune India in an exclusive interaction. “But that’s changed. The past 18 months of innovation at Cisco outpace what we saw in the prior decade. Well, we're at a 25 year high in the share price right now,” says Patel.

Not surprising that Street is slowly warming up to the stock, which has gained 53% over the past year. While the company’s core business remains rooted in networking solutions, it has been expanding its portfolio to include AI-driven technologies and custom silicon development.

Patel, who is also the executive co-sponsor for Cisco India, is blunt about the stakes. “For me, the formula for staying relevant in tech is actually pretty simple: hire really smart people, have a clear strategy, and keep innovating relentlessly.”

Currently, half of Cisco’s research and development (R&D) spending, which stood at $7.98 billion in FY24 (16.36% of revenue), is on AI, cloud, and cybersecurity.

"AI-First" philosophy

Two years ago, it would’ve been difficult to call Cisco an “AI-first” company. But with its AI-native product launches such as HyperShield to its AI Defense security solutions, the company is placing AI at the centre of its technology stack. “Our mindset around AI is about baking it into the very fabric of how we build products. I feel like that's going to be the way that every product will be built moving forward,” says Patel.

That commitment has taken many shapes—starting with leadership. The addition of Kevin Weil, Chief Product Officer at OpenAI, to Cisco’s board underscores the company’s intent to fuse enterprise credibility with next-gen AI talent. But perhaps more telling are Cisco’s strategic investments in companies such as Anthropic, Scale AI, and Groq. “These aren’t just financial bets,” Patel tells Fortune India, adding: “We’ve made investments not just to go out and compound the dollars we have, but actually to make sure we learn, that we’re part of the conversation, and that we really understand the AI landscape.”

The efforts are showing up in the numbers. The company has reported over $600 million in AI orders in the first half of the current fiscal. This surge in AI-related business suggests that Cisco is successfully positioning itself as a key player in the AI infrastructure market.

“Think of us as the picks and shovels company during the AI gold rush,” says Patel. As hyperscalers, cloud providers, and sovereign governments scramble to build AI data centers, Cisco is supplying the critical infrastructure—high-performance silicon, power-efficient switches, and AI-native security.

“We’re seeing a global buildout of AI data centres,” he adds. “And Cisco’s infrastructure plays directly into that wave. Whether it's power constraints, sovereignty requirements, or the need for secure networking—those are the problems we’re built to solve.”

Robbins agrees. “We’re one of the few companies that actually builds the entire stack—from silicon to systems. That’s a massive differentiator. All our competitors? They use Broadcom. We build our own silicon.”

The heat is on

Of course, Cisco’s transformation hasn’t gone unnoticed. Rivals are also circling. HPE’s $14 billion acquisition of Juniper, Broadcom’s sale of VeloCloud to Arista, and the steady rise of Arista itself are all signals of a reshuffling in the networking and infrastructure landscape.

On whether the landscape had become more competitive, Robbins believes that it was always the case and, all the more now. “In fact, the last five to seven years have been the most competitive I’ve seen in my career,” commented Robbins.

When Naresh Singh, senior director analyst at Gartner Research and Advisory, posed a question: With Hewlett Packard Enterprises (HPE) buying Juniper for $14 billion, Broadcom selling its SD-WAN unit VeloCloud to Arista—was the networking landscape being reshaped in ways that could leave Cisco vulnerable?

Robbins, though, didn’t flinch. He even allowed himself a wry aside. “I’ll make one little funny comment—if Broadcom wants to sell you a software asset, I wouldn’t have a lot of confidence in how good it is at that,” he said, with a grin. “But that’s just me being snide.”

Both Arista and Cisco are targeting orders from cloud computing service providers and technology giants that operate internet data centers, known as "hyperscalers." Robbins went on to explain that Cisco has been there before. “We’ve competed with HPE before. We’ve competed with Juniper before. Bringing them together has already created a lot of confusion because of the DOJ situation they found themselves in. Now they have to integrate it and make decisions and do the work and keep the people and keep the talent and build the strategy and execute on the strategy. As a company, who’s bought a lot of companies, I know how hard that is.”

Cisco, of course, would know. With more than 250 acquisitions in its history, few companies understand the M&A playbook as well—or as painfully. It’s prominent acquisitions in recent years include Splunk, acquired in 2023 for $28 billion, IMImobile for $730 million in 2021, ThousandEyes for $1 billion in 2020, and Duo Security for $2.3 billion in 2018. Robbins, instead, points to the quiet gains Cisco has made while rivals wrestled with integration headaches. “We’ve already had customers flip to us. We’re going to compete. And we’re going to compete hard,” said Robbins.

Patel, though, doesn’t mince words when it comes to Cisco’s approach to acquisitions. “Your strategy cannot be acquisitions,” he says. “Your strategy has to be a very clear future state that you want to actually move the world towards. And if an acquisition accelerates that strategy, then you shouldn't be shy to deploy your balance sheet towards that.”

For Patel, the north star is innovation—especially around market transitions. He believes Cisco should not just catch these shifts but actively shape them. While the company has, at times, leaned heavily on M&A, Patel sees that as a mindset of the past. “You cannot have a strategy that is, in and of itself, acquisitions,” he tells Fortune India. “You have to be obsessed about building. Build great products—and if something helps accelerate that buildout, then great.”

That said, he’s quick to point out the value of the right acquisitions done with purpose. “Some of our best leaders today came through acquisitions,” he adds. “The person leading our AI business was CEO at Armorblox. The person driving our identity business came from Portshift. But again, M&A is not the strategy—it’s a tool,” Patel tells Fortune India.

Future-ready

The mantra—“operate at the speed of a startup, with the scale of a mega-cap”—is something Patel swears by. It’s also an acknowledgment that large enterprises often struggle to move fast, especially in frontier markets like AI. “We remind ourselves constantly—never get arrogant. Keep your head down, keep listening to customers, and move fast. Your clock speed as a company has to be high,” says Patel.

Robbins attributes this cultural shift in part to Cisco’s renewed emphasis on diverse teams. “Jeet and I couldn’t have grown up more differently,” he says. “I was raised on a farm in rural Georgia. He [Patel] grew up in India. When we sit down, we approach problems differently—but that’s where the magic happens. That’s why we care about diversity—not for optics, but for better outcomes.”

For Robbins, diversity isn’t about ticking boxes or corporate virtue but a core business strategy. “I want a room full of people that give me four different ways to solve a problem. You don’t get that if you have a room full of white men from Georgia. You’ll probably have some good food in that room—but not great innovation.”

Uncertainty still looms large—tariffs, regulatory flux, power constraints, nationalism, supply chain shocks, and inflation are just some of the variables global CEOs such as Robbins have to juggle. On the possibility of more manufacturing shift to India, Robbins shrugs. “Maybe. But we don’t know the end state yet. That’s the real challenge. Until we get policy clarity, no one wants to spend tens of millions on moving operations only to be hit by new tariffs again.”

Instead of waiting for normalcy to return, Cisco is operating under a new assumption: this is the new normal. “We’ve gone from one crisis to another for the past 15 years,” said Robbins. Even as the landscape remains volatile, analysts are cautiously optimistic about Cisco’s reinvention amid concerns around the slower revenue growth compared to Arista, and an innovation engine which is still playing catch-up in software-defined networking and cloud-native platforms. "While Cisco has not gotten much credit for their AI story, Cisco is starting to see meaningful traction with webscalers around AI," Morgan Stanley recently said in a report.

Cisco’s fiscal 2025 revenue guidance includes an estimated $1 billion in AI-related product orders, largely fuelled by demand for Ethernet networking gear and fibre-optic equipment that connects servers inside data centers. Not surprisingly, Patel believes the mood within the company is far more upbeat. “We don’t feel like a legacy company,” says Patel. “Not anymore. Our products are AI-native. Our customers are excited. And our people are energised,” he tells Fortune India.

Cisco’s board early this year cleared a $15 billion share repurchase program and a 3% dividend hike to $0.41 per share. “The market has always expected a certain level of dividends and share buybacks from Cisco, and we've remained committed to returning capital to shareholders. That’s something we’ll continue to do,” Patel tells Fortune India. Analysts at Deutsche Bank too see Cisco’s "significant" free cash flow generation supporting incremental cash returns to shareholders via buybacks and dividend growth. Cisco’s annual revenue is expected to be $56.5 billion in FY25, ending July 31, compared with $53.8 billion in FY24. Despite one-time costs from acquisitions and capex investments, free cash flow for the fiscal is projected at over $13 billion.

In the coming years, Cisco’s AI gamble will be tested against quicker, nimbler rivals and volatile macro conditions. “You never fight a megatrend,” Patel says. “You use it as a tailwind. AI is not hype—it’s a real shift. And Cisco is going all in.” That context from Patel shows that Cisco is no longer content being a footnote in tech history but would rather write a new chapter on its own terms.