Cerebras revenue doubles while margins crash over rental strategy
cerebras stock dropped 20% after guiding for gross margins of 38-41%, citing costs to rent back its own chips. this impacts investor confidence in AI hardware profitability amidst capacity shortages.
cerebras systems reported q1 revenue of $193 million, a 94% year-over-year increase, but shares plummeted 20% after the company forecast full-year gross margins between 38% and 41%. ceo andrew feldman stated investors misunderstood the guidance, which reflects costs incurred by renting back cs-2 systems from customers to temporarily boost available compute capacity. this strategy cuts into profits as the company builds out its own data centers. the situation signals the complex logistics of scaling ai hardware and the pressure to maintain infrastructure while racing to meet demand.