Intel, Cisco, Oracle: Are 1990s superstars ready for a comeback?

Maybe it seemed like it would never end: the hyped  "dot.com era" peaked on 10 March 2000 as the Nasdaq Composite Index reached 5,049 points after finishing a 24% rally in that year first two months. Since the fourth quarter of 1998, NASDAQ had appreciated 238%, posing the most intensive bull market in history.

But the correction that following would prove to be a heartbreaker, as NASDAQ lost 77% in the two following years.

The main players are still around
Corporations like Cisco, Intel, Microsoft and Oracle were to the equity markets what Cindy Crawford and Linda Evangelista were to the modeling world in the 1990s. The valuation of all three companies virtually shot through the roof as investors believed that these high-techn companies would change the world as we knew it, chart 1.

Reversed panic - herd behavior at its worst
What we experienced as the 1990s drew to an end was a gradual panic in the investor community as the stock markets kept going up and people bought into the market “not miss out on the great rally”. The result became that many blue chip tech stocks appreciated by up to 10 times, chart 2. As the correction kicked in, many of the known names lost virtually all of their gains and investors got extremely cautious about the sector for many years to come. 

Still going strong – at value stock valuation
As mentioned above, the market position for these companies are still strong, if not stronger than a decade ago. More importantly, they still deliver growth both on top line and bottom line. The whole world is “going online” the IT era enters what can believe to be the true boom. The analysts expect a great growth outlook for infrastructure, hardware and software, chart 3 and 4.


Although the 00’s could be viewed as a lost decade for these companies’ shareholders, the fundamental picture is still solid. Maybe the 2010’s will be the comeback decade for the superstars of the 90’s, although with more reasonable perceptions from the market on just how much they can accomplish. Looking at the valuation for the years ahead it certainly looks like we can expect the steady operational climate to continue, table 1.