Cerebras Systems experienced a nearly 20% drop in stock value after revealing narrower gross margin forecasts in its first earnings report since going public. Despite reporting a 94% year-over-year revenue increase to $193 million for the quarter and reducing net loss, concerns arose from guidance predicting margins between 38% and 41%, down from 47%. CEO Andrew Feldman indicated that investors misconstrued the margin outlook, explaining that the company needs to rent back equipment from a major customer, affecting profit margins as it builds its own data center capacity.

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In Brief

Posted:

3:41 PM PDT · June 24, 2026

Cerebras Systems logo Image Credits: Pavlo Gonchar/SOPA Images/LightRocket / Getty Images

Aisha Malik

Cerebras stock plunges after earnings as CEO says margin outlook was misunderstood

Shares of Cerebras Systems dropped almost 20% on Wednesday, even after the company delivered better-than-expected first-quarter earnings on Tuesday.

That’s because in its first earnings report since going public, the AI chipmaker forecast a narrower gross margin in its core business, guiding for a full-year margin of 38% to 41%, compared with the 47% reported in the first quarter. The stock hit a new low on Wednesday, almost hitting the company’s IPO price.

Cerebras CEO Andrew Feldman told CNBC that investors had misunderstood the company’s margin guidance, noting that Cerebras will need to rent back some equipment from one of its largest customers.

The company said during its earnings call that it decided to make more capacity available sooner by temporarily renting its own systems back from an existing customer while it builds out and deploys its own data center capacity. The company said this would cut into profit margins this year.

According to the company’s earnings report, revenue for the quarter reached $193 million, up 94% year-over-year. Net loss narrowed to $14 million, down from $23.9 million a year earlier.

Topics

AI, Cerebras, In Brief

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