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Cerebras stock falls nearly 20% after earnings on margin forecast
Shares of the AI chipmaker dropped sharply Wednesday after the company guided for lower full-year gross margins than the 47% posted in the first quarter. Revenue rose 94% year-over-year to $193 million while net loss narrowed to $14 million.
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Shares of Cerebras Systems fell almost 20% on Wednesday after the company issued its first earnings report as a public company and guided for narrower gross margins in its core business. The AI chipmaker reported first-quarter revenue of $193 million, up 94% from a year earlier, and narrowed its net loss to $14 million from $23.9 million.
It also guided for a full-year gross margin of 38% to 41% in its core business, below the 47% achieved in the quarter.
rental arrangement The company said it decided to make more capacity available sooner by temporarily renting its own systems back from an existing customer while it builds out its own data center capacity. Officials stated this arrangement would reduce profit margins for the year.
A spokesperson told CNBC that investors had misunderstood the margin guidance, noting the need to rent back equipment from one of the company's largest customers.
The decline occurred despite the company posting better-than-expected first-quarter results. The earnings report marked the first financial disclosure since Cerebras went public.
