(FORTUNE Magazine) – Can a four-year-old dethrone Cisco? That's the question people are asking of Juniper Networks, the Mountain View, Calif., company with the hottest stock in the industry--its shares are up 494% since its June 1999 IPO, spanking Cisco's 118% rise during the same period. And this is no dot-com speculation. Juniper has real sales. In 1998, Cisco controlled 86.6% of the $175-million-a-year market for high-speed routers. Juniper had a 6% share. One year later, Juniper has 17.5% of a $578 million pie. According to Dataquest, Cisco is down to 80.7%.

Juniper is the brainchild of Pradeep Sindhu, a computer scientist who burned out at Xerox in 1995, split for the south of France, and returned with the idea for a brand-new company. Someone, he realized, needed to build reliable, high-performance Internet Protocol (IP) routers to support the full-service Net that was emerging. Kleiner Perkins partner Vinod Khosla agreed with him and committed to $2.3 million in first-round funding. Institutional Venture Partners, Crosspoint, NEA, and Benchmark Capital followed later. Sindhu hired his first employee on Valentine's Day 1996. Today there are 425.

CEO Scott Kriens and Juniper's management team have impressed investors with relentless innovation and consistency. "Their product portfolio, execution, and strong management have made them best in class," says Mark Edelen at Thomas Weisel Partners. Dataquest analyst David Schwartz says Juniper will continue to gain market share. Service providers like Uunet and Qwest enjoy having the choices a multivendor market affords them, so many of them are steering business away from Cisco to Juniper. Also, Juniper's JUNOS traffic management software is sometimes more reliable than Cisco's IOS system, according to Mark Sue at Lehman Brothers. Like other analysts, he views Juniper as a serious threat to Cisco in the high-speed niche.

Of course, Cisco rejects that notion. Says Larry Lang, Cisco's VP of service provider marketing: "We have a better product." He adds that Cisco wouldn't even consider acquiring Juniper, a tactic that in the past has brought in new technology and stifled competitors. "We don't acquire defensively. Even if we did, there would be higher priorities."

But Sue points out that Juniper has its own Cisco-like edge. With its $30 billion market cap, Juniper can aggressively seek out companies to buy. "You could argue Juniper is Cisco seven or eight years ago. It could be a better Cisco."

Juniper management says the company can win on its own merits. "Cisco is an incredibly powerful integrator," says Joe Furgerson, VP of marketing. "But Juniper is an incredibly powerful innovator, and that is the contrast. Share will come if we innovate and target the largest service providers. That's how we win."

We'll see. Cisco has crushed other contenders--remember Wellfleet, Bay, and SynOptics?--and the high-speed networking market is new and wide open, meaning that startups (such as

Avici Systems in Billerica, Mass.) might well try to do to Juniper what it has already done to Cisco.

--Angela Key