Cisco Takes a Tumble Memory Prices Bite Back

• Cisco's stock plummeted 12% due to surging memory prices tied to AI data center demand
• Increased AI demand has led to a global memory shortage, impacting Cisco's margins
• Cisco plans to raise prices and renegotiate contracts to mitigate rising component costs
• Other tech giants like Apple and Qualcomm also face uncertainty due to the memory shortage

Ogre the Top: Cisco's Rough Day

Well, howdy folks, Donkey here, reporting live from... wherever the news is! Today's tale is a bit of a downer for our techy friends over at Cisco. Seems like their shares took a dive, a whole 12% plunge! Now, I ain't no Wall Street donkey, but even I know that's gotta sting. It's their worst day since 2022 folks. Apparently, these rising memory prices are puttin' the squeeze on 'em. You know, like when Shrek tries to give me a hug... too tight, buddy, too tight.

AI Demand: It's a Memory Hog!

So, what's the dealio? Turns out, all that fancy AI stuff everyone's talkin' about? Well, it needs a whole lotta memory! And because everyone and their mother wants AI data centers, there's a global shortage. Now, I remember one time, Shrek said, 'Ogres are like onions.' Turns out, so is the tech industry! One thing impacts another. And, because all the big wigs are orderin' tons of memory for these data centers, there's not enough to go around for smartphones and other gadgets, which is why you should check out Spirit Airlines Sells Planes Recalls Flight Attendants A Dark Turn?

Feeling the Pinch: Apple, Qualcomm, and Now Cisco

It ain't just Cisco feeling the heat. Apple, Dell, Qualcomm... they're all feeling the pinch. Qualcomm even mentioned this shortage when they gave a pretty weak forecast recently. It's like when you're baking a batch of waffles and you realize you're outta syrup! Major bummer. These shortages are creating uncertainty for tech companies, just like when Shrek forgets to brush his teeth. Nobody wants to be around that.

Cisco's Plan: Raise 'Em Up

So, what's Cisco gonna do about it? Well, their CEO, Chuck Robbins, says they're gonna raise prices! And revise contracts! And... *negotiate*! Sounds like a lot of grown-up stuff to me. Their finance guy, Mark Patterson, said they're gonna 'control what they can control.' That's the spirit! You tell those memory prices who's boss! Though, maybe they should hire Shrek to do the negotiating. Nobody says no to Shrek.

Better Results, Worse Forecast

Here's the kicker, though. Cisco actually had a pretty good quarter! Better than expected, even. But... (there's always a but, isn't there?) they gave a mediocre forecast for the future. That's probably why the stock dropped. It's like when you get a whole plate of waffles, but they're all cold. Disappointing, right? Product gross margin was down because of these pesky memory costs. It's like Donkey trying to keep up with Shrek...it's hard.

Stay Tuned: The Memory Saga Continues

So, there you have it, folks. The saga of the rising memory prices and the impact on Cisco. Will they be able to raise prices and renegotiate their way out of this mess? Only time will tell. But one thing's for sure, this is gonna be a bumpy ride for the tech world. Now, if you'll excuse me, I gotta go find some waffles. And maybe some syrup... and hopefully Shrek brushed his teeth. This is Donkey, signing off!