Cerebras Q1 EPS miss sends shares down 9% after-hours

Investing.com -- Shares of Cerebras Systems tumbled over 9% in after-hours trading Tuesday after the newly public chipmaker served up a mixed bag for its first quarter of 2026. While the self-proclaimed builder of "the world's fastest AI infrastructure" beat revenue expectations of $180.8 million with a $193.4 million haul, it missed the mark on the bottom line, reporting earnings of $0.22 per share versus analysts' consensus expectations of a $0.16 per-share loss.

The top-line result represented a 94% year-over-year surge and a 13% sequential increase, according to the company's earnings release. GAAP net loss for the quarter was $14.0 million, though on a non-GAAP basis the loss narrowed considerably to $2.5 million. Shares closed the regular session at $226.72, up 1.02%, before sliding to approximately $209.99 in after-hours trade following the post-close earnings release, per Investing.com data.

The results are the company's first since Cerebras completed what it billed as the largest semiconductor IPO of all time in May 2026, pricing shares at $185 and raising $6.4 billion on the Nasdaq. The company ended Q1 with $3.3 billion in cash, equivalents, restricted cash, and short-term investments, providing a substantial war chest as it scales its wafer-scale AI accelerator business.

CEO Andrew Feldman struck an upbeat tone. "This was an outstanding start to 2026 for Cerebras. AI has moved from being a novelty to being useful and productive. Cerebras' wafer-scale technology delivers the fastest AI in the world. And fast AI is more valuable than slow AI because it is more productive," he said. CFO Bob Komin added that the quarter "highlights the large and rapidly growing opportunity in front of us," pointing to the company's focus on "innovating at the pace of demand."

The earnings release was accompanied by two significant partnership announcements that management will likely lean on to reassure investors. Cerebras disclosed a multi-year deal with OpenAI valued at more than $20 billion, covering 750 megawatts of high-speed inference compute to be deployed over several years. The two companies also co-launched Codex-Spark, a near-instant coding model capable of delivering more than 1,000 tokens per second. Separately, Cerebras announced a multi-year partnership with AWS to bring fast inference globally, combining AWS Trainium 3 chips for prefill with Cerebras CS-3 systems for decode.

Despite those headline deals, the market's after-hours reaction focused on the EPS shortfall and a notable gross margin warning embedded in the guidance. Full-year 2026 core revenue guidance came in at $855 to $865 million, implying roughly 69% year-over-year growth at the midpoint. But Q2 core gross margin guidance of 36% to 38% represents a sharp compression from the 47% core gross margin posted in Q1, a dynamic that could weigh on near-term sentiment alongside the per-share loss miss.

The after-hours stumble also comes against a bruising broader backdrop for semiconductor stocks. The Philadelphia SE Semiconductor Index tumbled 7.6% on Tuesday in a sector-wide selloff. Cerebras had, until its post-close report, outperformed the sector during the regular session.

Analyst sentiment heading into the print was broadly constructive. Wedbush held an Outperform rating with a $270 price target, while Craig-Hallum, Needham, Rosenblatt, and Mizuho each carried Buy-equivalent ratings with price targets ranging from $300 to $325, according to Investing.com. Whether any of those firms revise their targets in response to the Q2 margin guidance and EPS miss will be closely watched when analyst notes begin circulating Wednesday morning. Short interest, last reported at 17.15% of float as of May 29, 2026, means any negative analyst revisions could amplify selling pressure.

The next major near-term read on AI chip sector health arrives Wednesday, June 24, when Micron Technology is scheduled to report its Q3 2026 results. Reuters noted investors view Micron's print as a broader pulse check on AI infrastructure momentum following Tuesday's sector selloff. For Cerebras specifically, the next scheduled financial disclosure is its Q2 2026 earnings release on September 2, which will offer the first full-quarter view of how the OpenAI and AWS partnerships are translating into recognized revenue and whether the anticipated gross margin compression proves transitory or structural.

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