AI bull marks the revenge of the Dotcom ‘boxmakers’ like Cisco, Dell. How to

(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — I remember being a retail stockbroker in 1999, pitching shares of Mellon Bank to my retail brokerage customers. After the repeal of the Glass-Steagall Act under President Bill Clinton, a wave of bank and brokerage mergers and acquisitions had taken place. These included the buyouts of PaineWebber by UBS, Donaldson Lufkin & Jenrette by Credit Suisse, JPMorgan by Chase Manhattan, Bank of America by NationsBank and Citicorp by Travelers. My pitch was that Mellon was on the shortlist to be acquired — which eventually happened in 2007 by the Bank of New York. But my pitch looked ridiculous to the other brokers in the boardroom. They couldn’t understand why I would be wasting my time looking to make clients ten or fifteen points in a stock when I could just be pitching Dell Computer, Cisco Systems, EMC or Hewlett-Packard. Yes, I’m using the original names for these companies… I’m old school like that). These stocks were doubling and tripling every few months back then. I was shooting for singles and doubles while the other brokers were swinging for the fences. They had a point, in the short-term. It was the early days of Internet 1.0 and I was talking about deposits and savings account growth. One of my colleagues who had recently switched away from a pitch on Bristol Myers to selling fiber optics companies to his clients made the statement “I will never pitch a non-technology stock to my clients ever again. Everything else is a waste of time.” I tell this story because many of the names we were enamored with in that era were what came to be known derisively as “the boxmakers” as investors threw in the towel on them. In the wake of the original Dotcom Bubble’s bursting, you couldn’t give these stocks away. Cisco and IBM went to sleep for almost two decades. Dell was taken private after struggling for what seemed like forever. New technology growth stories eventually came along that were more heavily involved in software, wireless communications, social media and semiconductors. The companies making PCs, routers and servers – big gray boxes – were never thought of or spoken about again. They were simply out of the conversation. Until now. One of the more interesting aspects of the Internet 3.0 era we’re in now — the AI datacenter buildout — is that it is heavily reliant on next-generation equipment. Millions upon millions of boxes (modern versions, of course) are being purchased every quarter, by cloud providers around the world. Old Tech is playing a huge role in the AI boom and it’s a lot of fun to see some of the stocks from my youth making a comeback all these years later. Sean is going to drop the normal Monday charts and then walk you through how Dell, HP and Cisco have become relevant again to growth investors, and I’ll be back with some technicals. Sector Leaderboard As of Sept. 29, there are 211 names on The Best Stocks in the Market list. Top Sector Ranking: Top Industries: Top 5 Best Stocks by Relative Strength: Sector spotlight: Sean — IBM was just added to the list on Friday of last week. IBM’s AI strategy centers on watsonx, its enterprise platform that helps companies build, govern, and deploy generative AI and machine-learning models across hybrid cloud environments. Bank of America recently detailed in a report all the companies involved in building a data center in 2025. In the report, he 800-pound gorilla of the data center build Nvidia is there, along with other sexy names like Arista, Huawei, and SMCI. I was surprised when I saw some of the old-guard tech names involved. Names like IBM, CSCO, Dell and even HPE (HP split into two companies, HPQ and HPE). Take Dell for example. Dell plays a big role in data center build-outs by providing the core infrastructure — servers, storage, networking — and modular data center solutions that bundle racks, power, and cooling for data center deployment. HPE’s chart is slightly further along; HPE offers modular and prefabricated data center architectures (e.g. “PODs” and scalable modules) to speed deployment, simplify expansion, and improve energy efficiency. And finally, there’s CSCO — the enduring reminder of what bubbles can do to a stock: CSCO is providing the networking gear and AI-driven management software that move data efficiently and securely across those AI-heavy data centers. Its last all-time high came on March 27, 2000, some 6,414 trading days and 5,145 S & P points ago. CSCO hasn’t been this close to new highs since Creed’s ‘Higher’ was climbing the Billboard charts in 2000. Left for dead after the first tech boom, these stocks are quietly staging a big comeback in the age of AI. Over the past year, IBM…