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Silicon Squeeze: Memory Shortages and Margin Shifts
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…
The skinny
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