Cerebras Stocks Plunge Amid AI Chip Business Disappointment

Cerebras Systems, a Sunnyvale, California-based company, saw its shares plummet by over 18% premarket on Thursday after it missed key estimates in its second earnings report as a public company.

The company's AI chips business, which had been driving growth and positioning Cerebras as a challenger to Nvidia, failed to meet expectations.

Cerebras' cloud business, however, showed significant growth, quadrupling to $126 million in the second quarter compared to the same period last year.

The decline in AI chips sales and adjusted gross margin falling to 40.6% from 46.5% in the prior quarter raised doubts about Cerebras' ability to challenge Nvidia's dominance in the market.