Cisco Says Hardware Price Hikes Are ‘Last Resort’ as Memory Costs Rise: CSCO Stock Falls Over 6% (UPDATED)

Editor’s Note: The story has been refreshed with the latest market price action and a revised headline.

Cisco Systems Inc (NASDAQ:CSCO) raised prices on parts of its hardware lineup in fiscal 2026, and the increases added measurably to revenue growth, even as the company described the move as something it would rather avoid.

Price Hikes Called “a Last Resort”

CFO Mark Patterson told analysts on Wednesday’s fourth-quarter earnings call that price increases are “certainly a last resort” for Cisco, and said the hikes are narrowly targeted at hardware products with heavier memory utilization and not software pricing.

Patterson added that customers, “while they do not like it, they understand that it is an industry issue, not a Cisco issue.”

Price Hikes Added Real Revenue Growth

Patterson said price increases had previously contributed roughly four to five percentage points of growth in ex-webscale orders, and that the impact on revenue would become more significant as the increases were fully reflected in shipments.

“We are doing everything we can to secure the right supply at the right prices and build up strategic inventory where needed and advance purchase commitments. We are also doing a lot internally,” Patterson added.

Last month, SK Group, parent company of SK Hynix Inc. (NASDAQ:SKHY), Chairman Chey Tae-won called current memory prices “abnormally high” and urged the industry to prioritize expanding supply over maximizing profits, warning that prolonged high prices could slow demand and invite new competitors into the market.

CoreWeave Inc. (NASDAQ:CRWV) raised prices roughly 25% across its AI computing offerings in July, citing surging demand, while SanDisk Corp. (NASDAQ:SNDK) CEO David Goeckeler said AI demand has shifted customer conversations from routine quarterly price negotiations to long-term strategic partnerships.

Q4 Results Beat Across the Board

Cisco reported fourth-quarter revenue of $17.25 billion, beating analyst estimates of $16.82 billion, according to Benzinga Pro. The networking equipment company reported adjusted earnings of $1.22 per share for the quarter, beating analyst estimates of $1.17 per share.

For the first quarter, Cisco expects revenue of $18 billion to $18.2 billion and adjusted EPS of $1.32 to $1.34, both ahead of analyst estimates. The company projected fiscal 2027 revenue of $72.2 billion to $73.4 billion and adjusted EPS of $5.05 to $5.11, also topping Wall Street’s expectations.

Price Action: CSCO stock closed 2.86% higher on Wednesday at $123.88 and fell 6.21% to $116.18 in pre-market trading on Thursday.

Benzinga edge rankings indicate Cisco’s stock has a Momentum score in the 92nd percentile and a Growth score in the 10th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Shutterstock/ Sundry Photography