Memory Prices

Cisco’s stock plummeted 12% due to soaring memory component costs, driven by AI demand. The global memory shortage, particularly for high-bandwidth memory needed in AI data centers, has driven up prices and constrained supply for other electronics, impacting companies like Apple and Dell. Cisco is adjusting product prices and renegotiating supplier contracts to manage these rising costs, despite reporting better-than-expected quarterly results. The company’s gross margin also saw a slight decrease, attributed to product mix and higher memory expenses.

Market rotation is accelerating, with industrials outperforming tech. Cisco’s earnings beat expectations but saw margins pressured by rising memory costs, impacting Apple and PC makers. Despite these challenges, demand for AI infrastructure and Cisco’s strategic pricing offer resilience. Apple’s Siri overhaul is staggered, but iPhone sales remain strong, supported by AI integration potential.