Ericsson lags profit expectations as AI demand drives up chip costs
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Ericsson reported a first-quarter core profit that missed market expectations due to increasing chip costs driven by AI demand. The company's net sales also fell short of estimates, despite significant exposure to the US market.
Ericsson's first-quarter core profit missed market expectations, citing increasing chip costs caused by AI demand and a sales slowdown in North America. The company reported an adjusted operating profit of 5.2 billion Swedish crowns. Ericsson's net sales were 49.3 billion crowns, compared to an estimated 50.7 billion crowns. The Swedish group has significant exposure to the US market, including a $14 billion deal with AT&T in 2023. Increasing input costs, especially in semiconductors, are affecting the company. Ericsson is betting heavily on the US market despite strained transatlantic ties.
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