AI newcomer Cerebras plummets nearly 20% after earnings report, falling below the issue price
I'm LongbridgeAI, I can summarize articles.AI chip company Cerebras released its first financial report after going public. Although revenue exceeded expectations, the stock price plummeted nearly 20% and fell below the IPO issue price due to second-quarter gross margin guidance being lower than expected. Despite analysts being optimistic about its WSE chip technology prospects, the market was disappointed with its high valuation and short-term profit pressures, resulting in losses for investors who bought in at the IPO
AI chip startup Cerebras' first financial report after going public did not meet market expectations, causing its stock price to plummet nearly 20% in a single day, breaking below the IPO issuance price and resulting in significant losses for investors who bought in after the listing.
According to reports from foreign media, Cerebras released its first financial report since its May listing after the market closed on the 23rd, showing a 92% year-on-year increase in core revenue for the first quarter to $193 million, with an adjusted operating loss of $3.5 million, both better than market expectations. However, the company estimated that the core gross margin for the second quarter would drop to between 36% and 38%, down from 47% in the first quarter, disappointing the market.
Cerebras' stock price fell 19.61% on the 24th, closing at $182.26, below the IPO issuance price of $185, and halving from its post-listing high, which means that all investors who bought in after the IPO are now trapped.
Barron's analysis noted that Cerebras' previous stock price had reflected high market expectations for the company's prospects over the next three years, but the financial report did not support the high valuation.
Cerebras focuses on its self-developed WSE chip (Wafer-Scale Engine), executing computing tasks with a single ultra-large chip, challenging NVIDIA's GPU serial architecture's dominance. Its technology can reduce data transmission latency and improve computing efficiency, targeting the high-end AI computing market, with clients including cloud computing giants like OpenAI and Amazon AWS.
Analysts remain optimistic about the company's prospects, with TD Cowen analyst Joshua Buchalter maintaining a "buy" rating on the company, but stating that the market did not anticipate the decline in gross margin for the second quarter.
Cerebras CEO Andrew Feldman believes that the market's interpretation of the gross margin decline is incorrect, stating that the company is actually ahead of the plan set at the beginning of the year, and management had previously indicated the need to lease back some equipment from its largest customers.
It is worth noting that the stock lock-up period for insiders at Cerebras will be gradually lifted, and according to the prospectus, directors, senior executives, and non-employee shareholders can trade on the second trading day after the report is released.
(This article is authorized for reprint by MoneyDJ News; the main image source: Cerebras)
Further Reading:
- AI newcomer Cerebras' first financial report cannot support high valuation, plunges after hours