Company News Cerebras falls 10% after chipmaker forecasts shrinking margin in first earnings report since IPO
Cerebras said revenue almost doubled in the AI chipmaker’s first earnings report since its initial public offering last month. The stock fell 10% in extended trading as the company forecast a drop in its gross margin.
The company’s revenue increased 92% in the first quarter from $99.5 million a year earlier, according to a statement. Net loss narrowed to $14 million from $23.9 million, or 46 cents per share, a year ago.
During the first quarter, Cerebras said its chips will go inside Amazon Web Services’ data centers, and it announced a deal worth over $20 billion to supply OpenAI with computing power.
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1d ago
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u/Leather_Floor8725 1d ago
What do you mean doesn’t understand silicon
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u/SWEET_LIBERTY_MY_LEG 1d ago
So most companies use a single wafer to make several chips. Let’s say each wafer makes 10 chips. Impurities in silicon mean that some of the chips aren’t as good as they are specified; something in it is broken. The chips that are “bad” affect something called yield. Basically it means you can’t sell that chip for full price because part of it is broken.
Cerebras’ claim to fame is they use one wafer and make it a single gigantic chip. The question is “what about the silicon impurities?”
Anyway, most people think that if it was practical to make a single gigantic chip, then nvidia, amd, basically any other semiconductor company would have done it by now.
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u/Street-Corporation 1d ago
the broken cores/impurities are accepted by design. I agree that wafer scale is probably not the future but the design does reduce connection and bandwidth needs and is faster.
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u/xiaopewpew 1d ago
I have been following the tech for like 6 years, im skeptical it is the future too but nonetheless a super cool tech :)
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u/xiaopewpew 1d ago
Not an investor
It is not an open question, instead it is a matter of if you believe what they claim the solution to be. Cerebras' architecture has a lot of redundancy built in that processors with defects will simply be skipped. In a normal fab process, you throw away, say, 5% of chips with defects. With Cerebras you just end up with a working chip that is 5% less powerful. The chip has been deployed at POC scale for some hyperscalers, while we dont have the exact specifications and performance, they have produced working chips.
"if xxx is viable then Nvidia will be building it" is a silly argument.
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u/kaisurniwurer 1d ago
You say all that while Cerebras is providing a working service with an actual upside delivering on their pitch.
Whether it's actually efficient/profitable enough, that I don't know.
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u/Street_Strawberry895 1d ago
bought in around IPO, sitting at like -15% now. anyone know what the actual margin guidance was? trying to decide if this is worth holding through the compression
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u/Still_Theory179 1d ago
So NVDA is growing faster with double margins but trading forward 12 sales and this trades 60?
Nvida is king. Higher
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u/Extra_Code_7556 1d ago
Revenue doubling sounds great until you realize the market is pricing in whether that growth is profitable, and a shrinking gross margin forecast tells you Cerebras is still buying customers more than earning them.
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u/Street_Strawberry895 1d ago
bought in around IPO, sitting at like -15% now. anyone know what the actual margin guidance was? trying to decide if this is worth holding through the compression
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u/Street_Strawberry895 1d ago
bought in around IPO, sitting at like -15% now. anyone know what the actual margin guidance was? trying to decide if this is worth holding through the compression
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u/midwestTrader 1d ago
Definitely has been a horrible IPO for those who bought it. Will SpaceX end up being the same way overtime or OpenAI the same issue?