Updated from 2 p.m.

Cisco ( CSCO), the sleeping 800-pound gorilla of networking gear, is showing signs of new vitality.

At least that's what one analyst concludes after sitting through the company's state-of-the-business presentation this week, and ruminating on the company's big gamble last month to take a leading role in the future of TV.

Upgrading Cisco to a buy after more than a year with a neutral rating, JPMorgan Chase analyst Ehud Gelblum says the San Jose, Calif.-based tech giant has shown a willingness to throw some of its cash around to climb out of its router rut.

Cisco is in the second day of its annual investors' pep rally, during which business heads pitch their go-to market strategies and estimate their addressable opportunities. All good stuff, to be sure. Cisco also reiterated its 2006 sales growth target, which is somewhere between 10% and 15%.

All the skits and charts and demos, along with the $5.3 billion deal last month for cable-kit maker Scientific-Atlanta ( SFA), suggest Cisco isn't content with its stagnant showing of recent years.

"We finally see Cisco breaking out of the revenue growth box it has been in for the past 18 months," says Gelblum in a research note Tuesday.

No question, investors see video as the next big thing on the Net, and Cisco certainly plays a part in that. But with its bid for Scientific's set-top box and video-delivery infrastructure business, Cisco is shifting its strategy a bit.

The SFA deal shows a "willingness on Cisco's part to go on the offensive and attack top line growth in new markets rather than sit back and play defense around its core switching and routing platforms," writes Gelblum.

Cisco shares rose 22 cents to $17.78 Wednesday. The stock, which fetched $80 at the height of the Internet building boom, has been stuck in the high teens for 18 months.

Of course, bold moves carry big price tags, and some Cisco watchers see a gray lining to the silver cloud.

Plowing more than $5 billion in cash into the Scientific deal will likely slow down Cisco's share-repurchase campaign. Last quarter, Cisco spent $3.5 billion on buybacks, taking its cash pile down to $13.5 billion from $16.1 billion in the prior quarter. And because Cisco keeps a big chunk of its cash offshore, the pile immediately available for deals is not as big as one might think.

The upshot: Cisco may have to pull out the credit card for Scientific, some say.

"Since international cash cannot be used for share buybacks, dividends or U.S. acquisitions, Cisco will likely raise debt for the SFA acquisition," writes UBS analyst Nikos Theodosopoulos in a report Wednesday. Theodosopoulos has a neutral rating on Cisco.

Whether it's desperate, bold or risky, Cisco has decided not to simply wait around for corporate tech spending to rebound.

"We are encouraged that Cisco is stepping up its efforts to take new chances and throwing the proverbial spaghetti at the wall to see what sticks," says JPMorgan's Gelblum.