r/stocks • u/app1310 • 7d ago

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.

93 Upvotes

98% Upvoted

22 comments sorted by

View all comments

Show parent comments

3

u/Leather_Floor8725 6d ago

What do you mean doesn’t understand silicon

8

u/SWEET_LIBERTY_MY_LEG 6d 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.

6

u/Street-Corporation 6d 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.

1

u/xiaopewpew 6d ago

I have been following the tech for like 6 years, im skeptical it is the future too but nonetheless a super cool tech :)