Cerebras Stock Plummets on Mixed Quarterly Results

Cerebras Systems saw its stock plummet over 9% in early trading on Thursday after it failed to meet key estimates, casting doubt on its ability to challenge Nvidia's dominance in AI chips.

The Sunnyvale-based company reported mixed quarterly results, with its cloud business growing significantly but its hardware sales declining. Cerebras' revenue from cloud computing roughly quadrupled to $126 million compared to the same quarter last year, while its hardware sales fell to $54.1 million from $70.3 million.

The company's adjusted gross margin also fell to 40.6% from 46.5% in the prior quarter, and its revenue missed analysts' estimates despite a higher annual outlook.

Morgan Stanley analysts noted that execution remains a key concern for Cerebras, given the scale and speed of the capacity build required to support the ramp-up.