Cisco's Record Revenue Can't Shield It From Rising Memory Costs

Cisco Systems stock dropped 9.3% on Thursday despite reporting record fourth-quarter revenue of $17.3 billion and adjusted earnings of $1.22 per share.

The company saw a significant decrease in gross margins due to soaring memory costs and a less lucrative hardware sales mix, resulting in Cisco subtracting about 68 points from the Dow and roughly $41 billion in market value.

Memory chip makers Micron Technology and SanDisk benefited from Cisco's margin issues, with Micron gaining 5.1% and SanDisk surging 13.5% after an ambitious investor day presentation.