Cisco Stock Drops Amid Margin Concerns Despite Record Revenue

Cisco Systems, a global networking hardware and security provider, saw its stock price fall by 8.40% to $113.47 on August 13. The decline came despite the company's record revenue and strong demand for AI-related products.

The stock was up nearly 50% this year before the drop, and trading volume reached 61.1 million shares, which is about 137% above its three-month average of 25.7 million shares.

Cisco's fiscal fourth-quarter results showed a total (non-GAAP) gross margin for the quarter dropping to 66.3% from last year's 68.4%. This decline was partly attributed to the increased cost of components used in AI hardware, such as memory.