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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.11

+0.3%

Oct 31 9:30 AM EDT

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From: Lynn

7/13/2018 4:20:16 PM

of 77397

[Groan] "Cisco stock drops on a report Amazon Web Services is considering selling its own network devices"

The devices make it easier to shepherd traffic around networks.

In developing its own, AWS could facilitate the shifting of traffic onto its own servers.
Shares of Amazon gained less than a percent Friday.

Sara Salinas | @saracsalinas
Published 2 Hours Ago Updated 7 Mins Ago CNBC.comAmazon's Jeff Bezos

Networking company stocks fell off Friday following a report by The Information that Amazon Web Services is considering selling its own network switching devices.

Cisco dropped 4 percent by the end of trading, representing a loss in stock value of roughly $8.5 billion. Juniper gave up more than 2 percent. Arista Networks dropped more than 4 percent, and F5 Networks dropped roughly a percent. Broadcom, which makes chips used in switching devices, was down more than 3 percent on the day following the report, extending a rough week for the stock.

The devices make it easier to shepherd traffic around networks. In developing its own, AWS could facilitate the shifting of traffic onto its services and away from customers' on premises systems. However, networking vendors are well entrenched in large companies' data centers, and Amazon could face significant sales challenges convincing customers to swap existing gear. It would also be a significant departure from Amazon's expertise in providing hosted cloud services.

The report says the Amazon products are being tested with some customers, and could launch within the next 18 months. However, it also cautions that Amazon may decide against bringing them to market.

Amazon and Cisco didn't respond to requests for comment.

Shares of Amazon gained less than 1 percent Friday.

Read the full report at The Information

cnbc.com

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