Cerebras shares slide after first public earnings report on weaker margin outlook

Cerebras shares fell sharply after the company’s first earnings report as a public company, with the market focusing on weaker gross margin guidance despite strong revenue growth and a much smaller adjusted loss than analysts expected. The AI chipmaker reported first-quarter revenue of $193.4 million, up 92% year over year, and an adjusted net loss of $2.5 million versus expectations for a $36.75 million loss. Shares fell about 11% after hours to $201.55 and were indicated down roughly 14% premarket, before sliding 17% after the results as investors weighed first-quarter core gross margin of 47% against guidance for 38% to 41% for the full year. CEO Andrew Feldman said investors had misunderstood the outlook and that Cerebras was outperforming the plan it presented around its IPO, while also noting margins would not improve in a straight line because the company needs to rent back equipment from a major client. Investors are also watching a staggered lock-up schedule that will make about 28 million Class A shares eligible for trading this week, while the company continues to face pressure to add data center capacity even as permitting and local opposition can slow expansion.