AI chipmaker Cerebras down 11% after first public earnings report

Cerebras Systems reported its first public earnings on May 8, 2024, with its stock declining 11% following the release. The company announced total revenue of $73.7 million for the first quarter of 2024, representing a 92% increase compared to the $38.4 million generated in the same period of 2023. This revenue growth was primarily driven by increased sales of its Wafer Scale Engine (WSE) chips and related systems to customers in the artificial intelligence and high-performance computing sectors. Despite the strong revenue performance, Cerebras Systems provided a forecast for the second quarter of 2024 that indicated a projected core gross margin of 40% to 42%. This outlook was lower than the 45.5% core gross margin reported for the first quarter, leading to investor concerns about profitability. The company attributed the anticipated decrease in gross margin to a shift in product mix and increased investments in manufacturing and supply chain operations. Cerebras Systems also highlighted its expanding customer base, including new engagements with organizations in the pharmaceutical and financial services industries, underscoring the growing demand for its specialized AI hardware solutions.