Stock Track | Cerebras Systems Plunges 11.68% in After-Hours Trading on Margin Concerns Despite Earnings Beat

Stock Track06-24

Cerebras Systems' stock experienced a significant 11.68% plunge in after-hours trading on Tuesday, following the release of its first quarterly earnings report as a public company. The AI chipmaker reported better-than-expected results but faced investor skepticism over its future profitability outlook.

The company posted Q1 core revenue of $191.3 million, up 92% year-over-year and beating analyst estimates, with an adjusted loss of $0.04 per share compared to expectations of a $0.16 loss. Despite these strong results, shares fell sharply as investors focused on the company's margin guidance. Cerebras forecast full-year core gross margins of 38% to 41%, down from the 47% reported in the first quarter, and significantly below AI chip rivals like Nvidia and AMD.

Further pressure came from the company's revelation that it will temporarily rent back its own data center capacity from existing customers to meet near-term demand, which executives said would depress margins by 10 to 15 percentage points through the rest of the year. The guidance for continued negative operating margins through 2026, combined with broader concerns about AI infrastructure costs and an upcoming lockup expiration for IPO shares, contributed to the post-market selloff.

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