According to CNBC, Cerebras reported its first earnings as a public company and guided investors to expect core gross margins to decline from 47% in Q1 to 38–41% by full-year 2026. CEO Andrew Feldman pushed back on the selloff, arguing the guidance was misinterpreted and that the company is tracking ahead of its pre-IPO plan. Some analysts lifted estimates after the call, but a staggered lockup expiration also flooded the market with fresh shares this week, adding downward pressure.

Feldman's defense has merit. Cerebras is shipping products faster than it promised before going public, and margin compression during a scaling phase is not uncommon in semiconductor businesses. Some analysts saw the call as a buying opportunity and raised price targets, suggesting the selloff may have overshot.

The punishment fits the crime. Investors didn't sell because of bad vibes. They sold because margin compression is a direct hit to the only part of the AI story that matters after the IPO pop: whether this company can turn demand into durable profit. Feldman may be right that the guide was read too harshly. But newly public companies don't get the benefit of the doubt for long, especially when extra shares are also hitting the market through lockup expiration. The market is asking a simple question: Can you grow and stay profitable, or are you just buying revenue?