Ericsson slightly lags profit expectations as AI demand drives up chip costs

Ericsson's first-quarter core profit slightly missed market expectations, pressured by rising chip costs linked to AI demand and a sales slowdown in North America. The update points to margin pressure from supply-chain and input-cost headwinds, while also signaling softer regional demand. The miss is likely to weigh on Ericsson shares, but the impact appears company-specific rather than sector-wide.

Analysis

Ericsson's first-quarter core profit slightly missed market expectations, pressured by rising chip costs linked to AI demand and a sales slowdown in North America. The update points to margin pressure from supply-chain and input-cost headwinds, while also signaling softer regional demand. The miss is likely to weigh on Ericsson shares, but the impact appears company-specific rather than sector-wide.