Wall Street remains bullish on the AI hardware and infrastructure company, with all 10 analysts covering the stock continuing to rate it a ‘Buy’ or higher.
- Morgan Stanley described the report as “a good first quarter out of the gates.”
- Wedbush said there were no surprises in Cerebras’ first-quarter earnings report.
- For Q1, the company reported revenue of $193.41 million and a loss of $0.22 per share.
Shares of Cerebras Systems (CBRS) tumbled on Wednesday after the company reported its first-ever earnings since going public over a month ago.
At the time of writing, CBRS stock was down more than 16% and was among the top ten trending tickers on Stocktwits.
However, Wall Street remains bullish on the AI hardware and infrastructure company, with all 10 analysts covering the stock continuing to rate it a ‘Buy’ or higher, according to data from Koyfin. At least four firms offered positive commentary after first-quarter results, and three raised their price targets.
Morgan Stanley analysts, led by Joseph Moore, described the report as “a good first quarter out of the gates” amid very strong indications of demand, according to the note seen by Seeking Alpha.
Wedbush said there were no surprises in Cerebras’ earnings report and that it continues to see numerous potential catalysts ahead to drive upside. It also noted that the recently struck deals with OpenAI and Amazon “significantly limit any probability” of disappointment, Seeking Alpha reported.
UBS viewed the results positively and cheered the company’s move toward broader customer diversification, while pointing out that accelerating demand for specialized infrastructure could support strong growth over the decade, TheFly reported.
For the first quarter, the company reported revenue of $193.41 million and a loss of $0.22 per share. The consensus estimate for revenue was $180.8 million, and the loss per share was $0.29. For the full year, it guided revenue in the $855 million to $865 million range, higher than the $824.8 million consensus estimate.
Morgan Stanley’s Moore flagged that Cerebras’ gross margin guidance reflects “a conservative guidance mindset” to insulate itself from potential mishaps, which could happen more often with building a cloud business.
For the second quarter (Q2), the company guided core gross margins between 36% and 38%, which is lower than 47% reported for Q1. Needham said Cerebras’ core gross margin will improve faster than expected, driven by rising cloud prices and capacity expansion.
On Stocktwits, retail sentiment on CBRS turned ‘extremely bullish’ from ‘bearish’ over the last 24 hours.
One user on the platform sees the pullback in shares as a buying opportunity.
View this Stocktwits post
Since going public on May 14 through the stock’s previous close on Tuesday, CBRS has gained more 22%.
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