Cerebras shares dropped nearly 20% on June 24 following a 2026 sales and margin outlook that fell short of investor expectations [1, 2]. The stock had already fallen about 10% the previous day after the company reported its first-quarter earnings [3, 1].
Cerebras reported Q1 revenue of $193 million, up 94% year-over-year, and a narrowed net loss of $14 million compared to $23.9 million a year earlier [1]. Despite strong top-line growth, the company forecasted a full-year gross margin of 38% to 41%, down from 47% in Q1 2026 [1, 2].
CEO Andrew Feldman said investors misunderstood the margin guidance and attributed the projected dip to a temporary equipment rental arrangement with a large customer. The company plans to rent back equipment to free capacity sooner while it builds out its own data centers [1, 2]. "It is misunderstood. You know, we laid out a plan at the start of ‘26. We shared that plan as we went public a few months ago, and we're beating that plan," Feldman said [2].
Feldman noted the challenge of expanding data center capacity amid real estate and permitting delays. "We're trying to move at the speed of AI, and data centers move with the speed of real estate," he said. "Whether that's a success or not, we'll have to see" [2].
Unlike competitors such as Nvidia, Cerebras currently faces no supply shortages of cutting-edge process nodes or high-bandwidth memory [2]. The company is under pressure to open additional data centers but progress is slowed by external factors [2].
Following the earnings announcement, insiders will begin unlocking sales of roughly 28 million Class A shares as per the IPO prospectus, adding potential selling pressure [2].
The next key milestones include monitoring the impact of the equipment rental strategy and ongoing capacity expansion amid external delays.
