Cisco falls as margin miss, memory costs overshadow strong orders

Cisco CSCO.O shares fall 8% premarket as margin miss overshadows strong demand

Q2 adj. gross margin slipped to 67.5%, below 68.14% estimate, hit by soaring memory costs

Analysts at Piper Sandler said "Component concerns overshadow a good qtr", adding that memory‑driven margin pressure and ongoing Security weakness kept the bar high, even as networking and AI infrastructure "executed extremely well"

CEO Chuck Robbins said Cisco has lifted prices and tightened partner contracts to track faster memory‑cost swings, and expects margins to improve into FY27

Cisco now expects FY26 revenue of $61.2–61.7 bln, helped by robust AI pipeline and early campus refresh activity

AI orders surged to $2.1 bln, up from $1.3 bln last quarter

YTD, stock up 11%