Cerebras stock plunges after earnings as CEO says margin outlook was misunderstood
Shares of Cerebras Systems fell nearly 20% on Wednesday, even after the company posted better-than-expected results profit for the first quarter on Tuesday.
That’s because the AI chipmaker forecast smaller gross margins in its core businesses in its first earnings report since going public, meaning a full-year margin of 38% to 41%, compared to the 47% reported in the first quarter. The stock hit a new low on Wednesday, nearly reaching the company’s initial public offering price.
Cerebras CEO Andrew Feldman told CNBC that investors misunderstood the company’s margin guidance and noted that Cerebras will have to rent back some equipment from one of its largest customers.
The company said this during its… revenue calling that it decided to make more capacity available earlier by temporarily renting its own systems back from an existing customer, while it expands and deploys its own data center capacity. The company said this would reduce profit margins this year.
According to the company’s earnings report, revenue for the quarter was $193 million, up 94% year over year. Net loss fell to $14 million from $23.9 million a year earlier.
