Shares of AI chipmaker Cerebras Systems (CBRS.US) fell approximately 10% in after-hours trading following the release of its first earnings report as a public company, as its annual sales forecast disappointed investors who had anticipated a larger capture of the artificial intelligence data center market.
The company stated on Tuesday that revenue for 2026 is projected to be between $855 million and $865 million, representing a 69% year-over-year increase at the midpoint. This figure surpasses the average analyst forecast of $824.8 million.
In its inaugural quarterly report, first-quarter sales surged 94% to $193.4 million. For the period ended March 31, the company reported a net loss of $14 million, or $0.22 per share, which was $0.07 better than expected.
Analysts had, on average, estimated revenue of $181.4 million and an expected loss of $58.6 million. The company's hardware business contributed $110.6 million in sales, while cloud and other services reported $82.8 million.
Like its competitors, Cerebras Systems faces the challenge of managing high investor expectations. The data center construction boom fueled by AI workloads has led investors to become accustomed to robust profitability and rapid revenue growth driven by surging demand.
Chipmakers such as Nvidia, among others, frequently exceed Wall Street's expectations by significant margins, making even solid quarterly results no longer a guaranteed catalyst for share price appreciation.
This report marks the company's first since its landmark initial public offering, which raised $5.5 billion, the largest in chip industry history. Cerebras Systems has carved out a unique niche in AI infrastructure with its innovative technology built around a massive chip, which it claims is better suited for running large AI models and generating rapid responses for users.
The stock's volatility reflects the lofty expectations the market has placed on chipmakers in the AI era. After debuting in May at an opening price of $185, the stock reached a high of $311.07. Following Tuesday's earnings release, it dropped to a low of $202.25 in after-hours trading. Since its market debut, the stock has gained 23%, closing the regular New York trading session at $226.72.
The earnings release coincided with a sharp decline in chipmaker stocks during the regular trading day, described by one Wall Street analyst as a "chip massacre." The Philadelphia Semiconductor Index fell 7.9%, with all 30 of its component companies seeing their share prices drop.
Chief Executive Officer Andrew Feldman identified securing sufficient data center space as the primary current challenge. "It is supremely ironic that after we and Nvidia invented all this technology, the limiting factor is actually building buildings," he remarked in an interview prior to the earnings release.
Chief Financial Officer Bob Komin stated during the post-earnings conference call that the scarcity of data center space is leading Cerebras Systems to lease back some of its own systems from customers and "aggressively" expand its own capacity. He noted these costs would reduce this year's gross margin by approximately 10 to 15 percentage points.
The subdued annual guidance overshadowed a previously announced agreement with OpenAI. Under this multi-year deal, OpenAI will deploy Cerebras Systems' 750-megawatt high-speed inference systems over the coming years. The company stated the agreement is valued at over $20 billion.
Additionally, the two companies jointly launched Codex-Spark, a model designed for near-instant coding and optimized for interactive work. Cerebras Systems also highlighted its established multi-year partnership with Amazon AWS. The company indicated it will "introduce a decoupled inference strategy where AWS's Trainium 3 chip handles prefill, and the Cerebras CS-3 runs extremely fast inference for decoding."
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