Key facts
- Cerebras shares fell 16% in extended trading after its second-quarter results.
- The company's adjusted gross margin decreased to 40.6% from 46.5% in the prior quarter.
- Cerebras raised its annual revenue and gross margin forecasts.
- Second-quarter sales increased 74.3% year-over-year to $180.11 million.
- Second-quarter core revenue of $209.87 million surpassed analyst expectations.
Cerebras Systems shares slumped over 18% premarket on Thursday after its quarterly results presented a mixed picture, raising concerns about its AI chip business's ability to challenge Nvidia. The company's cloud business revenue quadrupled to $126 million, but hardware sales, including AI chips, declined to $54.1 million from $70.3 million a year ago. Second-quarter adjusted gross margin fell to 40.6% from 46.5% in the prior quarter, attributed by finance chief Bob Komin to higher costs for renting computing capacity.
Despite these challenges, Cerebras raised its annual revenue and gross margin forecasts, projecting 2026 adjusted revenue between $880 million and $890 million. CEO Andrew Feldman noted that placing memory directly on the chip has mitigated the impact of surging high-bandwidth memory prices. The company's second-quarter sales increased 74.3% year-over-year to $180.11 million, with core revenue of $209.87 million surpassing analyst expectations. Cerebras utilizes TSMC's 5-nanometer process for its wafer-scale engine chips and has a multiyear compute agreement with OpenAI.