Cerebras Systems' stock tumbled more than 17% following the company's first earnings report as a public company, prompting Chief Executive Andrew Feldman to tell CNBC that investors had "misunderstood" the company's margin guidance.
"It is misunderstood," Feldman said on CNBC's Squawk on the Street. "You know, we laid out a plan at the start of '26. We shared that plan as we went public a few months ago, and we're beating that plan."
The shares dropped over 17% on the day, touching a low of $185.23 - the lowest since the company listed on the Nasdaq last month. The company projected adjusted gross margins of 38% to 41% for 2026, down from the 47% adjusted gross margin it reported for the first quarter. That 2026 range sits well below the margin levels cited for competitors in the report - including Nvidia in the mid-70% range and Advanced Micro Devices in the mid-50% range.
Feldman said management had been transparent about an operational detail that some investors may have overlooked: Cerebras will need to rent back certain equipment from one of its largest customers. On the call he cautioned that the company's margin profile and operational cadence are not likely to be "a straight line."
Lock-up release timing for insiders also adds a layer of complexity for investors. According to the firm's prospectus, about 28 million Class A Cerebras shares will become eligible for trading by directors, officers and non-employee shareholders on the second trading day after the Tuesday earnings announcement. Feldman said the intention behind the structuring was to smooth the schedule that typically governs post-IPO lock-ups, but he added candidly: "Whether that's a success or not, we'll have to see," in remarks to CNBC hosts Carl Quintanilla and Leslie Picker.
On the post-earnings call, Feldman emphasized customer momentum despite the guidance debate. He noted that OpenAI's GPT 5.4 runs on Cerebras chips and that the ChatGPT maker will deploy 750 megawatts of the company's semiconductors as part of the agreement. Feldman also said Amazon Web Services would soon begin using Cerebras chips in its data centers, with related revenue expected to materialize in the next year.
Feldman further contrasted Cerebras' supply picture with that of some rivals, saying that Nvidia has been contending with shortages of high-bandwidth memory and constraints tied to a cutting-edge manufacturing process at Taiwan Semiconductor Manufacturing Co. By his account, Cerebras does not require those specific inputs. Still, he acknowledged a practical hurdle shared across the industry: pressure to bring additional data center capacity online while public opposition and permitting timelines can delay expansion. "We're trying to move at the speed of AI, and data centers move with the speed of real estate," he said.
The comments come as investors digest a mix of customer wins, margin guidance that trails peers, and near-term trading dynamics influenced by insider lock-up schedules and operational arrangements with large customers.