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Fox Business - Cerebras claims its WSE AI chip is the LARGEST in the world

Thumbnail of the video “Fox Business - Cerebras claims its WSE AI chip is the LARGEST in the world”
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Author: Fox Business
Categories: Business Personal Finance Science
Tags: business, finance, science
Views: 3 · Last viewed: 2026-10-16 14:14 UTC

Short Summary

Main recommendation: Investors should evaluate Cerebras on its core operating metrics, such as revenue growth, gross margin, and operating margin, rather than on the short-term stock drop after its quarterly report. Cerebras' CEO, Andrew Feldman, argues that the quarter beat expectations on those measures and that the company's wafer-scale chip gives it a speed advantage in AI computing.

Key Points

  • Revenue rose 103% year over year, and cloud business, a subset of revenue, nearly quadrupled.
  • Gross margin beat expectations by about 400 basis points (and was up 950 basis points year over year), and operating margin beat by about 1,500 basis points, according to Feldman.
  • The stock fell about 13.5% during the broadcast; the anchor noted the drop followed disappointing headline numbers, and Feldman attributed it partly to a pullback after an extraordinary run following its May IPO and to other factors unrelated to the reported results.
  • Feldman said Cerebras raised year-end guidance and said the company expects to more than triple revenue next year, citing a large backlog (RPO) and expanded data center and manufacturing capacity.
  • The company's frontier model, Sol, is served on Cerebras hardware under a partnership Feldman says involves more than $20 billion in commitments.
  • Some customers were unable to obtain data center space needed to ship equipment, so Cerebras shipped less hardware than expected and leaned on cloud services to meet demand.

Details Worth Noting

  • Concrete instructions: The transcript gives no step-by-step instructions for viewers. The only actionable advice is Feldman's request that investors evaluate the company on its core metrics (revenue excluding pass-through costs such as power, space, and cooling; gross margin; and operating margin) rather than on the stock's movement.
  • Feldman said the revenue figure excludes pass-through costs such as power, space, and cooling, which are billed to customers and passed along to outside providers.
  • The reported quarter showed revenue of $180 million against an expected $194 million, with a net loss of about $450.5 million in the second quarter, compared with a profit a year earlier. Feldman's framing emphasized growth and margins instead.
  • Cerebras' wafer-scale chip is roughly the size of a dinner plate, versus a postage stamp for most processors. Feldman said big chips process information faster, citing up to 15 times faster performance in one comparison.
  • Feldman said the company's models run at speeds, around 750 tokens per second in one cited example, that he claims other hardware cannot match.
  • Feldman said demand for AI compute is constrained by data center availability, both for cloud and on-premise hardware.

Bottom Line

Cerebras is presenting its quarter as a growth and margin story, while acknowledging a sharp stock decline; the financial performance and the company's future outlook remain unverified claims from its CEO.