Cerebras Systems (CBRS) stock plummeted 5.52% in pre-market trading on Tuesday, as the AI chipmaker faced significant selling pressure ahead of a critical financial milestone.

The decline comes as the company prepares to report its first quarterly earnings results since its high-profile initial public offering in May. Analysts note the stock trades at a high valuation based on elevated expectations for future growth, leading to investor jitters and risk aversion before the earnings release. A specific concern highlighted is the beginning of non-cash contra-revenue charges related to warrants granted to strategic partner OpenAI, which will affect the company's reported sales figures.

Further contributing to the downward pressure is an upcoming lockup expiration, which will make nearly 13% of IPO shares eligible for sale by insiders and early investors later this week, potentially increasing the available float. The stock's movement was also influenced by a broad selloff in the semiconductor sector during the pre-market session.