Key facts
- Cerebras shares fell 14% premarket after issuing a disappointing full-year profit margin forecast.
- The company projects 2026 adjusted gross margins between 38% and 41%, down from 47% in Q1.
- This forecast falls short of rivals like Nvidia and AMD but exceeds analyst expectations.
- Cerebras has a $20 billion deal with OpenAI and will supply chips to Amazon Web Services.
- The stock is trading near its lowest point since its market debut over a month ago.
Cerebras shares experienced a significant decline of approximately 14% in premarket trading following the company's first earnings report since its initial public offering. The chip designer warned that its projected adjusted gross margins for 2026, forecast to be between 38% and 41%, would fall short of the 47% achieved in the first quarter. This outlook trails behind competitors like Nvidia, which maintains mid-70% margins, and AMD, with mid-50% margins, although it surpassed analyst expectations of 29.58%.
Analysts attribute potential margin pressures to Cerebras manufacturing larger chips and leasing back its own systems to meet immediate demand while expanding data center capacity. The company's stock is now on track to trade at its lowest point since its market debut over a month ago, reflecting a broader cooling of enthusiasm for artificial intelligence stocks and concerns about the substantial investment required for AI infrastructure.
Despite the margin concerns, some analysts remain optimistic. Morgan Stanley increased its price target for Cerebras to $273 from $250, and TD Cowen emphasized the strategic importance of deals with Amazon and OpenAI for the company's long-term growth. Cerebras has secured a $20 billion multi-year agreement with OpenAI, with its chips powering the company's GPT 5.4 model and set to deploy 750 megawatts of semiconductors. Additionally, Amazon Web Services is slated to begin utilizing Cerebras chips in its data centers, with revenue expected to materialize in the coming year.