Woofun AI reports that Ericsson’s stock price declined by 10% on the Stockholm market, recording its steepest fall in 18 months. Outgoing CEO Börje Ekholm attributed the decline to escalating input costs, largely driven by surging demand for AI-related storage chips which have inflated component prices.

Citigroup analyst Andrew Gardiner emphasized that the primary concern is the potential intensification of cost pressures through 2027. Although Ericsson’s Q2 adjusted EBITA reached 6.88 billion Swedish Krona, a 7% year-on-year decrease that slightly exceeded Bloomberg’s expectation of 6.82 billion, the company continues to face headwinds from weak telecom operator capital expenditure. Consequently, Ericsson has reduced its workforce by approximately 5,000 employees by 2025 and plans further similar-scale cuts this year.