The paper employs the theory of innovative enterprise to analyze the transformation of Cisco from innovation to financialization. Opportunities for growth in the communication-technology sector are vast but Cisco’s innovation has stalled as massive spending on stock buybacks and cash dividends has reduced the firm’s ability to implement strategic investment in innovative capabilities. Innovation drove Cisco’s phenomenal growth in the 1990s with its ‘new economy business model’ promoting open standards and a ‘fabless’ organization adapting rapidly in a fast-growing enterprise-networking market. Stock-based acquisitions enabled capability accumulation, with streamlined integration processes. Using its stock as a ‘combination currency’, the company was able to fund its growth without incurring debt. Venture capitalists introduced professional management practices, while customer relationships and servicing were outsourced to value-added retailers (VAR), facilitating rapid expansion. Cisco was also able to use its rising share price as a stock-based ‘compensation currency’ to attract and retain engineers. This model underpinned the company’s move into carrier-class optical networking, in which Cisco was considered a serious challenger. With the bursting of the speculative bubble in 2001 and the sharp decline in Cisco’s share price, however, the innovative capabilities of the company began to unravel. The company refocused on enterprise customers and did not make the investments in in-house manufacturing and direct distribution needed to develop complex products and services for telecommunications operators. Cisco subsequently attempted unsuccessfully to move into a number of less technologically sophisticated consumer businesses. Without a rising share price, Cisco’s organizational integration also floundered. Key executives left, citing lack of investment in manufacturing and marketing capabilities as well as remuneration practices that reward the few rather than collective effort. For two ‘lost’ decades, the ‘financial commitment” of Cisco has focused on supporting its share price through buybacks and dividends, while richly rewarding top management.