Cisco Shares Slip as CFO Warns AI Infrastructure Push Will Pressure Gross Margins
Updated
Updated · Bloomberg · May 19
Cisco Shares Slip as CFO Warns AI Infrastructure Push Will Pressure Gross Margins
3 articles · Updated · Bloomberg · May 19
Cisco shares fell after CFO Mark Patterson said gross profit margins would see “ups and downs” as the company expands deeper into AI infrastructure.
At a JPMorgan technology conference, Patterson said supplying hardware to hyperscalers—the biggest data-center operators—carries a different margin profile than Cisco’s traditional business.
The warning points to a near-term tradeoff in Cisco’s AI strategy: chasing faster growth in data-center demand while accepting weaker profitability on some of that new business.
Cisco is fueling the AI boom, but can its strategy survive the industry's massive energy demands and looming supply chain risks?
Insiders are selling stock while analysts are bullish. Who should investors believe about Cisco's risky AI bet?