It’s been a while, but Cisco shares are soaring.
The networking technology giant’s stock were up 5.2% to close Thursday at $35.88, their highest point in 10 years.
The increase comes a day after Cisco projected a 1% to 3% gain in fiscal second quarter sales—marking a potential end to a two-year slump. Although the estimate is for minor growth, it does signify that the company’s move into a software services business from selling networking is business is gaining some traction.
Cisco said its overall revenue dropped 2% in its quarter ending Oct. 28 to $12.14 billion, slightly above Wall Street expectations.
Cisco (CSCO), like many legacy enterprise technology companies including Hewlett Packard Enterprise (HPE), has experienced a drop in sales over the past few years amid the rise of cloud computing. Amazon (AMZN) and Microsoft (MSFT) have built big businesses selling customers on-demand computing resources, which frees companies from buying as much data center gear from the likes of Cisco.
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To revive its business, Cisco has been buying cyber security businesses like OpenDNS and IT software companies like AppDynamics to help bolster its core networking hardware. This year, Cisco also debuted new data center switches and a strategy that involves customers paying subscription fees to access additional software features.
In addition to Cisco’s stock gains, data center storage company NetApp’s shares also rose after the company reported its latest earnings. NetApp (NTAP) stock rose 16% to $53.11 at the market’s close on Thursday after the company said its second quarter sales grew 6% year-over-year to $1.42 billion.
NetApp, like Cisco, has also been negatively impacted by cloud computing, and it’s shifting to selling data management software to help offset declines in its core storage hardware business.