Ericsson Stock Plunges 10% on July 14 as Storage Chip Costs Squeeze Q2 Profit Margins

According to BlockBeats, on July 14, Swedish telecom equipment maker Ericsson's stock plunged 10% on the Stockholm market, marking the largest decline in 18 months. The company warned that core network business profitability faces pressure due to soaring component costs, driven partly by AI-driven storage chip demand. CEO Börje Ekholm said component costs are rising and profit margin pressure may persist through 2027, according to Citi analysts.

Ericsson reported second-quarter adjusted EBITA of 68.8 billion Swedish kronor, down 7% year-over-year, slightly above Bloomberg's expectation of 68.2 billion kronor. The company is implementing further cost cuts, with plans for workforce reductions similar in scale to the 5,000 employees cut in 2025.