Cisco Sinks 9% Amid Memory Chip Price Surge
Cisco Systems' stock took an unexpected dive of 9.3% despite reporting record fourth-quarter revenue of $17.3 billion and adjusted earnings of $1.22 per share, both of which represent year-over-year growth. The company also secured around $4 billion in quarterly AI orders from hyperscale customers.
The sharp decline in Cisco's stock is largely attributed to the rising cost of memory chips, which has resulted in lower gross margins for the company. This issue has had a ripple effect on the Dow Jones Industrial Average, causing it to fall 0.17% while the Nasdaq Composite and S&P 500 indices remain relatively stable.
The impact of Cisco's stock drop was partially offset by Goldman Sachs' 1.1% gain, which added around 68 points to the Dow. The financial giant announced a small buyout in the options-based income space yesterday, leading investors to reevaluate their stance on the company.