Memory Chip Costs Crush Cisco Stock, Drag Down Dow

Cisco Systems reported record revenue and earnings for its fourth quarter, but the company's stock still fell 9.3% due to increasing memory chip costs.

The rising cost of memory chips squeezed Cisco's gross margins, leading to a decline in profits despite strong sales and AI orders from hyperscale customers.

Cisco saw $4 billion in quarterly AI orders, but the company's reliance on expensive memory chips made its earnings less impressive than they seemed.

The stock price drop had a ripple effect on the Dow Jones Industrial Average, which fell 0.17% despite gains in other sectors.