Cisco Plunges Despite Earnings Beat As A Global Memory Shortage Squeezes Margins

Welcome back to Breaking News to Trading Moves. Today: Cisco sold off hard even after beating estimates, and the culprit is a surge in memory costs tied to a worsening global memory shortage.

What happened

Cisco ($CSCO) reported fiscal Q2 revenue and EPS above expectations, but gross margin disappointed as memory costs jumped. Cisco said the cost pressure is forcing price increases and contract renegotiations and guided to lower gross margin for the current quarter.

Why the market cares

This is a reminder that “AI demand” doesn’t lift every tech name equally. When advanced memory prices rise during shortages, the value can shift toward component suppliers, while OEMs and hardware vendors get squeezed on margins unles ...