The AI buildout has resulted in an unanticipated casualty distant from Silicon Valley: telecom equipment manufacturers, who now compete with hyperscalers for the same memory chips. That is the mechanism behind Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC)'s worst single-day stock reaction in nearly three years. Looking into Ericsson's Q2 2026 results, the market's harsh reaction was more about forward guidance rather than a breakdown in existing operational execution. Meanwhile, reported net sales declined 6% to SEK 52.7 billion ($5.62 billion), missing the SEK 53.71 billion forecast, while organic sales excluding currency and one-offs remained essentially flat. Free cash flow before M&A fell to SEK 0.4 billion from SEK 2.6 billion a year ago, owing to increased inventories being accumulated ahead of scheduled third-quarter deliveries.