Rising memory costs weigh on Cisco margins despite strong AI demand
Cisco shares fell as rising memory costs hit margins despite a beat in quarterly revenue. The firm raised its full-year outlook amid strong demand for AI.
Insights:
Cisco Systems, Inc. reported a second-quarter adjusted gross margin of 67.5% today, falling below the 68.14% average estimate from analysts polled by LSEG. The company attributed this shortfall to recent global memory price increases tied to the accelerated build-out of AI infrastructure. This disclosure coincided with a roughly 7% drop in the company's shares during extended trading, as investors weighed the impact on reported profitability against management's long-term growth signals.
