“John Chambers is viewed on Wall Street as being a sun god, period.” — Susan Kalla, analyst, Friedman, Billings, Ramsey

RESEARCH TRIANGLE PARK — If you had been one of the smart people to buy 1,000 shares of Cisco stock at $12.33, its 52-week low, imagine how much richer you would be today.

Cisco jumped 55 cents, or 2.4 percent, to $23.78 on Wednesday, buoyed in part by bullish comments from the company’s chairman, John Chambers, at an analyst conference. That’s just off its recent one-year high of $24.45, and Cisco (Nasdaq: CSCO) was up several cents again in overnight trading.

Wall Street follows Cisco — and Chambers — like America once followed General Motors. If Cisco is doing well and Chambers is excited, then the news is likely good for the rest of the tech sector.

Chambers brighten the Street’s tech outlook with his comments about CEOs putting their feet back on the gas pedals are preparing to spend on IT in 2004.

“At least CEOs are taking their foot off the brake and are headed toward the gas pedal,” Chambers told the analysts and an audience watching via a web cast.

“This year,” he added in a reference to 2004, “Is about growth.”

Well, hallelujah!

Chambers’ remarks echo those of several other analyst firms that have predicted a revival in IT spending next year. No one foresees a return to the wild spending of the late ’90s-2000. But growth is potentially great news for all tech-related firms.

Back in a favorable light

It’s funny how a few quarters of good news also has changed the media’s view of Chambers and his firm. Business Week recently praised Cisco and Chambers in a cover story. Other press also has been favorable.

When the dot com world and the telecom industry both imploded, Cisco suffered and Chambers’ “wunderkind” reputation was tarnished. But one has to give Chambers and the company credit. Cisco made painful cuts but didn’t ignore research and development. The dominant networking hardware provider made acquisitions, such as the recent buy of Linksys in a move to capitalize on the emerging home wireless networking market.

Cisco has invested heavily in Voice over Internet Protocol technology and other aspects of wireless. Other moves include aggressive entry into security, data networking and storage plus the unveiling of a heavy-duty, faster router this week to counter a similar offering by Juniper.

Looking to the future, Chambers identified six areas of growth (security, home networking, VoIP, optical networking, storage, wireless) and said all could be $1 billion a year producers. “At the present time, all six technologies are headed in the right direction,” he said.

Tired of playing nice guys, Chambers and Cisco took a firm stand against Chinese firm Huawei in a battle over copyright.

The bottom line also is improving. Cisco has been driving up productivity, earnings per employee, and grew revenue 5.3 percent in its most recent quarter despite continued restrained IT spending.

On a winning streak

The Street certainly believes in where Cisco is going. Just look at the list of analyst ratings for Cisco since Sept. 3:

  • Legg Mason: Upgrade from Hold to Buy

  • Merrill Lynch: Upgrade from Neutral to Buy

  • USB Piper Jaffray: Upgrade from Market Perform to Outperform

  • RBC Capital Markets: Upgrade from Sector Perform to Outperform

  • CE Unterberg Towbin: Upgrade from Long-term Market Perform to
    Long-term Buy

  • Cairs & Company: Upgrade from Above Average to Buy

  • Deutsche Securities: Upgrade from Hold to Buy

  • Goldman Sachs: Upgrade from In-Line to Outperform

  • UBS: Upgrade from Neutral to Buy
  • Chambers also is not about to let up on the pressure to drive growth.
    “Our goal as a company at Cisco is to grow 10 to 15 percent a year over the next three to five years,” Chambers said.

    How many CEOs do you know even dare to think like that?

    The bullish remarks and trends led to quite a comment by an analyst, Susan Kalla of Friedman, Billings, Ramsey, to The San Jose Mercury News:

    “John Chambers is viewed on Wall Street as being a sun god, period,” she said. “His performance has been so consistent for so long it’s hard to view him any other way.”

    I imagine Ms. Kalla will get a nice Christmas card from Chambers.

    Rick Smith is managing editor of Local Tech Wire.