Cerebras slumps as mixed quarterly results test AI growth narrative (August 13)

Separately, shares of Cisco Systems fell around 8% as its outlook fell short of lofty expectations tied to its rise as a beneficiary of the AI data center buildout. The stock has gained more than 60% this year.

Cisco expects $7.5 billion in revenue from AI infrastructure orders from hyperscalers in fiscal 2027.

Aug. 13 (Reuters) - Cerebras Systems CBRS.O slumped over 9% in early trading Thursday after its quarterly results, raising doubts about the ability of its AI chips to challenge Nvidia.

Expectations were high for AI-linked companies including Cerebras and networking equipment maker Cisco CSCO.O, given the strong run-up in shares driven by Big Tech's ballooning spending, set to cross more than $740 billion for this year.

"Execution remains the key debate given the scale and speed of the capacity build required to support the ramp," said analysts at Morgan Stanley.

Citi and Mizuho cut their price targets slightly; the median target as per estimates compiled by LSEG implied an upside of 15% from the previous close.

Here are some details:

• Cerebras, in its second earnings report as a public company, offered a mixed picture as it increasingly derived revenue from cloud computing rather than its AI chips.