Watch Cisco Gives Tepid Margin Forecast, Marring Upbeat Outlook

Cisco gave a weaker-than-expected forecast for profitability in the current quarter, spurring concerns that mounting memory-chip prices are taking a toll on the company. Adjusted gross margin, which measures the percentage of sales left over after deducting production costs, will be 65.5% to 66.5% in the period that runs through April, the company said in a statement Wednesday. Analysts had estimated 68.2% on average. The outlook overshadowed an upbeat sales forecast — fueled by growing artificial intelligence revenue — sending the shares tumbling in late trading. Bloomberg Intelligence Senior Hardware and Networking Analyst Woo Jin Ho joins Bloomberg Businessweek Daily to discuss. He speaks with Carol Massar and Tim Stenovec.