After a blockbuster IPO, Cerebras (CBRS 7.42%) stock nosedived recently. The company reported its first-quarter 2026 results on June 24, its first earnings report since going public, and Cerebras shares fell nearly 12%. Revenue jumped 94% year over year to $193 million, beating Wall Street's consensus estimate of $181 million, and its operating loss of $3.5 million was smaller than expected, a huge improvement over its $19.3 million loss in the year-ago quarter. However, shareholders focused on management's comments that profitability was declining due to its $20 billion contract with OpenAI, which will reduce some cloud and services margins this year. Management said adjusted gross margin will be between 38% and 41% for 2026, compared with 47% in the first quarter. The sell-off occurred as AI chip stocks face pressure; over the past month, Nvidia shares and Broadcom stock are down about 9%. Some investors fear that hundreds of billions of dollars poured into AI may never translate into profits, and rising inflation could lead the Federal Reserve to raise interest rates sooner than expected. Core inflation rose to 3.4% in May, its highest level since October 2023.