Cisco Faces Margin Pressure From Memory Prices

Cisco Systems shares plunged as much as 12% on Thursday after the company warned that rising memory prices are squeezing margins, its worst session since 2022. Executives said strong AI chip demand, led by Nvidia, has caused a global memory shortage and higher costs; product gross margin fell to 66.4%, down 130 basis points. Cisco plans to raise prices, renegotiate contracts and adjust terms to offset the cost pressures.