Key facts
- Cerebras shares fell 14% premarket on a disappointing full-year margin forecast.
- The company projects 2026 adjusted gross margins between 38% and 41%, down from 47% in Q1.
- Cerebras' projected margins are lower than competitors Nvidia and AMD.
- The company has secured a $20 billion deal with OpenAI and will supply chips to Amazon Web Services.
- Cerebras' stock is trading near its lowest point since its market debut.
Cerebras shares declined approximately 14% in premarket trading following the company's first earnings report since its IPO. The AI chip designer projected 2026 adjusted gross margins between 38% and 41%, a decrease from the 47% achieved in Q1. This outlook trails competitors like Nvidia, which has mid-70% margins, and AMD, with mid-50% margins, though it surpassed analyst expectations.
Analysts suggest margin pressures may stem from Cerebras manufacturing larger chips and leasing back its own systems to meet immediate demand while expanding data center capacity. The company's stock is trading near its lowest point since its market debut over a month ago, reflecting a broader cooling of enthusiasm for AI stocks and concerns about the substantial investment required for AI infrastructure.
Despite margin concerns, some analysts remain optimistic. Morgan Stanley raised its price target to $273 from $250, and TD Cowen highlighted the strategic importance of deals with Amazon and OpenAI for long-term growth. Cerebras has 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. Amazon Web Services is also slated to utilize Cerebras chips in its data centers, with revenue expected to materialize in the coming year.