Shares of Cerebras Systems fell nearly 20% on Wednesday even after the company performed better than expected first quarter earnings On Tuesday.
That’s because in its first earnings report after going public, the AI chipmaker projected a narrower gross margin in its core business, guiding for a full-year margin of 38% to 41% compared to the 47% reported in the first quarter. The stock hit a new low on Wednesday, nearly impacting the company’s IPO price.
Cerebras CEO Andrew Feldman told cnbc Investors had misjudged the company’s margin guidance, noting that Cerebra would need to lease back some equipment from its largest customers.
The company said during this time earnings call It decided to make more capacity available soon by temporarily renting its own systems from an existing customer while it builds and deploys its own data center capacity. The company said this will 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 from $23.9 million a year earlier.
