Cerebras stock plunges after earnings as CEO says margin outlook was misunderstood
In its first earnings report since going public, the AI chipmaker forecast a narrower gross margin in its core business, scaring investors.
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An AI chipmaker's stock dropped nearly 20% after revealing lower expected profit margins for the year, despite reporting better-than-expected quarterly earnings. The company forecast full-year margins of 38% to 41%, a significant decline from the 47% margin it reported in the first quarter. The CEO attributed the stock decline to investor misunderstanding, explaining that the company decided to temporarily rent back some of its own systems from a customer while building out its own data center capacity, a move that will reduce profit margins this year. The company reported strong revenue growth of 94% year-over-year, but the margin guidance disappointed investors enough to push the stock to near its IPO price.
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