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Cerebras shares tumble after Q2 loss and modest Q3 outlook
The AI chipmaker reported Q2 core gross margin of 40.6%, after temporarily renting systems from cloud customers, and guided Q3 core revenue to $214 million to $216 million.
Cerebras Systems, an Nvidia rival in AI processors, saw its stock drop 17% in premarket trading after posting Q2 results and a Q3 outlook that did not meet investor expectations, according to Yahoo Finance.
Cerebras swung to a loss of $2.98 per share in Q2, down from a profit of $1.91 per share in the year-ago period. The company reported Q2 core gross margin of 40.6%, and it said the metric would have been 500 basis points higher, closer to its Q1 core gross margin of 46.5%, but for its decision to temporarily rent some of its own systems back from cloud customers to meet demand for inference services.
For Q3, Cerebras forecast core revenue of $214 million to $216 million, slightly above Wall Street consensus of about $210 million, though some analyst estimates were as high as $220 million. On the gross margin front, the company expects core gross margin in the range of 38% to 40% for Q3 and 41% to 43% for full-year 2026, with CFO Bob Komin saying Q3 is the low point before improvement in Q4.
Yahoo Finance also noted the company is transitioning from selling hardware directly toward deploying its proprietary technology through a cloud business. Last quarter, hardware revenue fell 23% year over year, while its cloud business nearly quadrupled to $127.7 million, and the firm is set to hold its Supernova event on Aug. 18.