Cerebras Systems Stock Plunges 17% Despite Strong AI Chip Demand and Raised Revenue Guidance

Cerebras shares plunge nearly 20% after missing earnings expectations -- hardware sales drop but AI cloud revenue climbs 281%

Cerebras on Wednesday reported its financial results for the second quarter, and while its earnings nearly doubled year-over-year, its shares plunged more than 18% in after-hours trading as it missed analysts' expectations, Reuters reports. Furthermore, the company's financial results suggest that Cerebras is increasingly succeeding at selling compute delivered by its hardware, rather than the hardware itself. For the quarter ended June 30, 2026, Cerebras reported revenue of $180.11 million, up from $103.32 million in Q2 2025. Earnings of the company's cloud services totaled $125.99 million, up dramatically from 33.03 million in the same quarter a year ago, but sales of hardware dropped to $54.12 million from $70.3 million in Q2 2025. Wall Street analysts expected Cerebras to earn $194.23 million during the quarter. During the quarter, Cerebras' operating expenses rose to $502.79 million (up from $89.28 million a year ago), its gross margin dropped to 14%, and it lost roughly $450.53 million. The main reason behind the company's skyrocketing operating expenses and losses is stock-based compensation triggered by its May IPO. Once the IPO happened, the company had to recognize the value of stock-based compensation as its expenses, as stock-based compensation jumped from $13.3 million in Q2 2025 to $377 million in Q2 2025. Without the stock-based compensation, the company's net loss would be $73.53 million. That said, the analysts were not disappointed by the huge loss, but rather by the earnings miss, the rapidly dropping hardware sales, and uncertain returns generated by Cerebras' new business model. Missing earnings expectations for an AI hardware company amid the AI market frenzy is not a thing that happens often. But perhaps more importantly is that Cerebras' hardware sales dropped 23% year-over-year, whereas cloud and other services revenue skyrocketed by 281%. On the one hand, this proves that the company's clients are more willing to buy its compute hardware in the cloud rather than own it, which means stable revenue streams. However, Cerebras' new business model requires Cerebras to put enormous amounts of capital into infrastructure before it can earn its cloud revenue. Under its original hardware model, Cerebras has to manufacture its Wafer Scale Engines at TSMC, assemble systems on its base, and sell its CS systems to customers, which then own the machines, install them in their own or leased data centers, and assume the cost of operating the infrastructure. Under its new model, Cerebras retains and deploys the hardware itself, secures data-center capacity and power, and operates the infrastructure, while customers pay Cerebras for access to AI inference/training compute over time rather than buying the machines outright. Without any doubt, demand for inference AI compute is enormous these days, and Cerebras' results prove it. However, the question is whether the company can produce attractive and sustainable profits on the capital it spends on hardware and infrastructure. The $20 billion OpenAI agreement is one example of the business model. Cerebras has committed to provide 750 MW of inference capacity over several years, and OpenAI has an option for another 1.25 GW. As a result, Cerebras must fund 750 MW of infrastructure buildout in advance and opt for another 1.25 GW well before it gets actual money from the AI giant. While OpenAI is assisting Cerebras in financing the project using a roughly $1 billion secured working-capital loan, still must spend money for quarters, if not years, before it earns any revenue. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Cerebras raises annual targets on strong AI chip demand

Aug 12 (Reuters) - Cerebras Systems (CBRS.O), opens new tab raised its annual revenue and gross margin forecasts on Wednesday, buoyed by robust demand for its chips from companies ramping up data-center capacity to power AI services. Still, its shares were down more than 7% in extended trading. The stock has gained 15.5% week-to-date. The chip designer is banking on growing demand for inference, the data crunching that occurs when a user queries a chatbot, as it seeks to challenge Nvidia's (NVDA.O), opens new tab dominance in the AI processor market. Cerebras' flagship wafer-scale engine (WSE) is ⁠a single chip the size of a dinner plate containing trillions of transistors, a design that it says is more efficient than connecting thousands of smaller graphics processors together, as Nvidia does. By placing memory directly on the chip, the WSE is built to accelerate inference and reduce the data-transfer delays associated with conventional graphics processors that rely on separate high-bandwidth memory. "We have made rapid progress in key areas required to deliver exceptional growth against our remaining performance obligations of $25.4 billion (contract revenue expected to be ⁠recognized in the future), and plan to more than triple revenue in 2027," finance chief Bob Komin said. The Sunnyvale, California-based company expects 2026 adjusted revenue between $880 million and $890 million, higher than its previous forecast of $855 million to $865 million. Annual adjusted gross margin is forecast at 41% ⁠to 43%, up from 38% to 41% projected earlier. Analysts, on average, estimate 35.89%, according to data compiled by LSEG. Second-quarter sales rose 74.3% to $180.11 million. Adjusted loss was $6.91 million, narrower than ⁠the $40.5-million loss a year ago. Cerebras is racing to expand chip volumes to support a $20 billion multi-year agreement to provide AI compute to OpenAI, a deal viewed as ⁠key to justifying its valuation. Its core cloud and services revenue, which reflects the OpenAI ramp, nearly quadrupled to $127.73 million in the second quarter. Reporting by Anhata Rooprai in Bengaluru and Max A. Cherney in San Francisco; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

Cerebras raises full-year outlook, but stock drops after second earnings report following IPO

Cerebras Systems raised its full-year guidance in the chipmaker's second earnings report following its IPO in May. But the stock plunged about 12% in extended trading. Here's how it did in the second quarter. Results aren't comparable to analyst estimates. * Revenue: $210 million * Loss per share: $2.89 Cerebras said it expects between $214 and $216 million in revenue this quarter, versus the average estimate of $212.6 million, according to LSEG. The $210 million sales figure for the second quarter represents core revenue. Cerebras also reported a GAAP revenue figure of $180.1 million. The company recorded a net loss of $450.5 million, after finishing with a profit of $309.5 million, or $1.91 per share, a year earlier. The company raised its full-year outlook, and now expects core revenue of between $880 and $890 million, up from a prior range of $855 million to $865 million. Cerebras CEO Andrew Feldman said in an interview that AI demand is "through the roof," and that companies are paying up for its specialty inference chips. Cerebras is challenging AI chip leader Nvidia for some AI tasks, especially those that need "low latency," or quick responses for interactivity. The company calls it "fast inference." The company said its core gross margin will expand to between 38% and 40% in the current quarter, addressing a concern for investors. "Gross margins are are in a good spot, and growing, because fast inference is priced at a premium," Feldman said in an interview, adding that Cerebras was able to increase the AI output of its systems. Cerebras went public on the Nasdaq in May, capitalizing on investor interest in semiconductors that can run AI models. It priced its offering at $185 and raised $6.4 billion in the offering. The stock peaked in May and has fallen since, but closed on Wednesday at $262.06, up 42% from its IPO. The chipmaker has $25.4 billion in remaining performance obligations, which it said was a sign of "extraordinary future demand." Feldman said that as Cerebras grows, it will benefit from larger scale. The company also said it expects revenue to triple in the next fiscal year. "We will manufacture more efficiently. We'll get better pricing on componentry. We'll amortize our manufacturing organization over more units," Feldman said. "All of those point up and to the right." In recent weeks, Cerebras a partnership with Nvidia rival Advanced Micro Devices with products going into production later this year, and said that OpenAI can use its chips to serve its latest model, GPT 5.6- Sol. Cerebras also offers access to its chips through its cloud, which reported $126 million in revenue during the June quarter.

Cerebras Q2 2026 earnings: stock falls after guidance raise

The AI chip company beat earnings estimates and lifted its 2026 revenue outlook, but shares fell sharply in extended trading Cerebras Systems (NASDAQ: CBRS) reported second-quarter results on Wednesday that beat Wall Street estimates on multiple metrics, but the company's stock fell roughly 17% in after-hours trading. Core revenue for the quarter reached $210 million, more than double the same period a year ago. GAAP total revenue was $180 million. Analyst expectations for core revenue were $191 million and for GAAP revenue were $194 million, according to CNBC. Cerebras reported an adjusted per-share loss of 5 cents, well ahead of the 17-cent loss analysts had projected, according to CNBC. The adjusted operating loss came in at $34 million, beating a Wall Street estimate of $63 million, according to Barron's. Under GAAP accounting, Cerebras swung to a net loss of $450.5 million from a profit of $309.5 million in the year-earlier period. Stock-based compensation of $386.6 million was the primary driver of the reversal, the company said. Cerebras raised its full-year 2026 core revenue outlook to a range of $880 million to $890 million, up from a prior range of $855 million to $865 million. The company also guided for third-quarter core revenue of $214 million to $216 million. Cloud revenue was a standout, with GAAP cloud and other services revenue reaching $126 million in the quarter, up 281% from a year earlier. Core cloud revenue rose 287% year-over-year to $127.7 million. The company ended the quarter with $25.4 billion in remaining performance obligations and $8.6 billion in cash, cash equivalents, restricted cash, and short-term investments, following a May initial public offering that raised $6.4 billion in gross proceeds. CEO Andrew Feldman said demand for fast inference is large and that the company is scaling to meet it. "Speed changes what AI can do," Feldman said in a statement. "It makes AI more useful, more productive, and opens entirely new markets." Chief Financial Officer Bob Komin said in a statement that the company plans to more than triple revenue in 2027. Feldman said that gross margins are "in a good spot, and growing, because fast inference is priced at a premium." Core gross margin for the quarter was 41%, an improvement of roughly 940 basis points from the second quarter of 2025, the company said. Before the after-hours decline, Cerebras shares had finished Wednesday's regular session at $262.06, a gain of 42% above the $185 IPO price.

AI chipmaker Cerebras Systems' stock plunges, despite posting solid earnings and guidance

Chipmaker Cerebras Systems Inc. boosted its full-year guidance after beating expectations on earnings and "core" revenue as it published its second-quarter results today, but its stock tumbled more than 17% in extended trading. The company reported an adjusted loss of 5 cents per share, easily beating Wall Street's forecast of an adjusted loss of 17 cents per share. Revenue for the period came to $180 million, trailing the Street's $194 million forecast, but the picture is complicated by the fact that the company uses a non-standard revenue metric to account for a couple of idiosyncrasies. The first is that it receives some pass-through revenue for which there is no margin, so it subtracts that amount from the total. Second, it issues warrants to two customers, and the amortization of those warrants is subtracted from its revenue under standard accounting practices, so it adds that back to arrive at its core revenue. As such, the company was able to report core revenue of $210 million in the quarter, up 50% from a year earlier and surpassing the Street's expectation of $201 million. All told, it delivered a net loss in the quarter of $450.5 million, having racked up a profit of $309.5 million in the year-ago period. Most of that loss is tied to stock-compensation costs that totaled $386.6 million. Looking ahead to the current quarter, Cerebras said it's anticipating core revenue of between $214 million and $216 million. It also raised its full-year outlook to a range of $880 million to $890 million. Before, it was looking for just $855 million to $865 million. Chief Executive Andrew Feldman (pictured) told analysts on a conference call that artificial intelligence demand is going "through the roof," adding that companies are willing to pay the asking prices for the company's specialized inference chips. He explained that the chipmaker is challenging AI leader Nvidia Corp. in some AI tasks, mostly those that require low-latency for real time interactions. The company calls this "fast inference." Feldman added that the company believes its core gross margin will expand to between 38% and 40% this quarter. Margins have previously been a big concern for investors. "Gross margins are in a good spot and growing because fast inference is priced at a premium," he explained. Despite this, Cerebras was unable to grow its order backlog during the quarter, which remained steady at around $25 billion. Nonetheless, Feldman insisted that this is a good sign of the "extraordinary future demand" the company is seeing. The CEO added that as the company grows, it's likely to benefit from larger economies of scale. For that reason, it anticipates that its core revenue will triple by the end of the next financial year. "We will manufacture more efficiently," he said. "We'll get better pricing on componentry. We'll amortize our manufacturing organization over more units. All of those point up and to the right." Feldman may not be too concerned about the volatility of the company's stock either, for this is nothing new for Cerebras. The chipmaker only went public in May in an effort to capitalize on investor's growing interest in rivals that can compete with Nvidia by manufacturing chips that run AI models. The offering was priced at $185 and helped Cerebras raise $6.4 billion. The stock then peaked at just over $309 at the end of May, before falling to a low of $169. It has been up and down since, closing at $262.06 on Wednesday. Cerebras is one of most notable companies in an increasingly crowded field of chipmakers that are desperately trying to steal some of Nvidia's market share in the AI industry. The company's Wafer-Scale-Engine chip stands out mainly due to its size, which is about the same as a standard dinner plate. While a 300-millimeter silicon wafer is usually cut into many smaller chips, Cerebras uses the entire thing to create one giant processor. Its chips have both compute cores and memory on the same silicon slab, which eliminates the need for an interconnect between them. This is why small and medium-sized models can run exceptionally fast on Cerebras' chips. Nvidia has totally dominated the AI industry now and become the single-largest beneficiary of the data center infrastructure boom, but many companies are looking to diversify, especially when it comes to powering AI inference workloads. As a result, Cerebras has managed to pick up a bunch of new customers. Previously, most of its chips were bought by two companies linked to the United Arab Emirates' royal family, but nowadays its backlog is dominated by OpenAI Group PBC, which signed a five-year contract to rent its cloud-based servers for inference. OpenAI was one of the companies to receive stock warrants as part of that deal. The other is Advanced Micro Devices Inc., which recently announced a partnership with Cerebras on a novel disaggregated inference platform. They're going to pair AMD's Helios rack-scale architecture for the compute-intensive pre-fill phase with Cerebras's chips for ultra-low-latency decode, with the resulting combination able to deliver five-times higher tokens per second per watt compared to existing platforms. Last month, Feldman stopped by theCUBE, SiliconANGLE Media's mobile livestreaming studio, during its coverage of the RAISE Summit, where he offered a more detailed breakdown of his company's advantage in AI inference:

Cerebras Stock Outlook: Can CBRS extend its rally? - Cerebras Stock Jumps 15%

Cerebras Stock Outlook: Can CBRS extend its rally? 1/12 Cerebras Stock Jumps 15% Cerebras Systems (CBRS) surged 15% to close at $251.98 on August 17, taking the stock back above the $250 mark. Investor attention is increasing as the company strengthens its position in the rapidly expanding AI inference market. (Sources: TradingKey, Barchart, Reuters) 2/12 OpenAI Partnership Fuels Rally Cerebras received a boost from its partnership with OpenAI, with the latter using Cerebras compute for its GPT-5.6 Sol Ultrafast mode. The service is designed to deliver significantly faster response speeds, highlighting Cerebras' growing role in OpenAI's AI infrastructure. 3/12 $20 Billion OpenAI Agreement Cerebras and OpenAI announced a $20 billion partnership in April. Under the agreement, Cerebras is expected to provide AI servers over three years, while OpenAI has committed to purchasing 750 MW of Cerebras compute capacity through 2028. 4/12 AI Cloud Revenue Takes Off Cerebras' AI cloud business has emerged as an important growth engine. AI cloud services revenue jumped roughly 281% year over year to about $126 million, underscoring strong demand for the company's inference-focused infrastructure. 5/12 Revenue Growth Accelerates Cerebras reported core second-quarter revenue of $209.9 million, representing a 103% year-over-year increase and exceeding analyst expectations. The company also forecast third-quarter core revenue of around $215 million and raised its full-year outlook to $880 million-$890 million. 6/12 Why Investors Are Watching Cerebras Cerebras uses its proprietary Wafer-Scale Engine architecture to accelerate AI workloads, with a particular focus on high-speed inference. Its relationships with major technology companies, including OpenAI, Amazon and AMD, are increasing its exposure to the expanding AI infrastructure market. 7/12 Stock Technicals Turn Bullish TradingKey highlighted a bullish technical setup after CBRS moved above the $247.24 Fibonacci level and reclaimed several short- and medium-term moving averages. The next potential technical target is around $273.80, although the $254-$261 region could trigger some profit-taking. 8/12 Key Support Levels The $247.24 level has emerged as an important near-term support zone for Cerebras shares. Holding above this level could help maintain the bullish momentum, while a deeper correction could bring the $214.38 area into focus as another significant support level. 9/12 The Risks Despite its strong growth, Cerebras remains loss-making and faces substantial infrastructure costs. Hardware revenue has come under pressure even as cloud revenue has surged, while the company continues to face intense competition from established AI-chip players such as Nvidia and AMD. 10/12 Cerebras vs AI Chip Giants Cerebras is positioning itself as a specialist in ultra-fast AI inference, while AMD is expanding its broader AI accelerator and data-center ecosystem. Intel, meanwhile, remains focused on its semiconductor and manufacturing turnaround. Cerebras' differentiated architecture gives investors another way to participate in the AI infrastructure boom. 11/12 The Bull Case The bullish case for Cerebras rests on growing demand for AI inference, its expanding cloud business and major customer relationships. The OpenAI partnership could provide significant recurring demand, while the company's expected revenue growth could improve its position as AI infrastructure spending continues to rise. 12/12 The Bottom Line Cerebras has regained strong momentum following developments around its OpenAI partnership and rapid cloud revenue growth. A sustained move above $247 could support another advance toward the $273.80 technical target, but high valuation, ongoing losses, infrastructure spending and intense competition make CBRS a high-volatility AI growth stock.

CBRS Stock Popped Nearly 10% Over 5 Sessions, IREN Jumped 15% -- Here's the 'Situational Awareness' Strate

Over the past five trading sessions, Cerebras Systems Inc. (NASDAQ:CBRS) and IREN Ltd. (NASDAQ:IREN) have delivered strong gains. CBRS stock climbed 9.55%, while IREN shares outperformed with a 15.90% jump over the same period. The unifying factor between the two stocks is that it is owned by Situational Awareness, a hedge fund betting aggressively on the physical infrastructure sustaining the artificial intelligence supercycle. Q2 13F Filing Reveals $20 Billion AI Portfolio The structural connection between both companies was formalized in Situational Awareness LP's Q2 13F SEC filing. Managed by former OpenAI researcher Leopold Aschenbrenner, the fund reported $20.24 billion in public equities as of June 30. The filing revealed a holding of 9.5 million in IREN valued at $433.25 million, alongside a newly initiated stake of 10,000 shares in Cerebras Systems valued at $2.21 million. While a severe July market contraction forced high-leverage margin unwinds -- leading Ken Griffin's Citadel LLC to acquire the fund's equity positions -- the core thesis of owning physical AI compute and power assets continues to drive independent momentum across both names. Markets MSTR CEO Calls MSCI's Index Proposal 'Ill-Advised,' Says Bitcoin Is an Operating Asset Strategy (MSTR) CEO slams MSCI's "ill-advised" proposal to exclude Bitcoin treasuries from indices, calling the impact "immaterial." 3 min read Read this article Major Operational Catalysts Power Recent Rallies Beyond institutional positioning, immediate operational achievements triggered the recent multi-day surge. On Aug. 13, IREN announced the successful delivery and acceptance of "Horizon 1'' -- a 50MW direct-to-chip liquid-cooled AI cloud deployment -- to Microsoft Corp. (NASDAQ:MSFT) under its 5-year, $9.7 billion contract. Concurrently, IREN achieved "NVIDIA Exemplar Cloud status on NVIDIA GB300 NVL72" following site testing. Latest Private Market Opportunities Join 400,000+ Investors Simultaneously, Cerebras announced that it is powering "Ultrafast," a new API tier for OpenAI's GPT-5.6 Sol model running up to 14x faster than standard processing. With OpenAI structurally committed to utilizing 750MW of Cerebras capacity through 2028, both CBRS and IREN stand as primary beneficiaries of the physical AI buildout. Connecting the AI Chipmaker and the Miner Both CBRS and IREN serve as textbook examples of Situational Awareness' overarching strategy. Cerebras Systems directly addresses the critical need for semiconductors and advanced chips required for cutting-edge AI computation. Simultaneously, IREN bridges the gap between digital assets and AI compute. IREN represents the Bitcoin-mining companies pivoting to leverage the physical scarcity of low-cost, grid-connected power for widespread AI hosting. How Have These Stocks Performed? Markets Ray Dalio Warns AI Bubble Could Burst Like 1929, 2000 as Evercore Sees 16% S&P 500 Upside: '...Companies Do Very Well, and Then It Collapses' Ray Dalio warns of an AI bubble burst while Evercore ISI sets a bullish 9,000 S&P 500 target. Discover Wall Street's split market outlook. 3 min read Read this article Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

US stocks: Cerebras slumps 18% as mixed quarterly results test AI growth narrative

Cerebras Systems experienced a notable drop in its shares after falling short of key financial projections. Although its cloud revenue saw a remarkable increase, hardware sales faced a downturn, sparking concerns regarding the competitive edge of its AI chip sector. Analysts pointed out difficulties in scaling operations effectively to satisfy demand. Similarly, Cisco Systems' stock also took a hit due to an outlook that did not meet expectations. Cerebras Systems slumped over 9% in early trading Thursday after it missed key estimates despite soaring cloud revenue, 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, given the strong run-up in ⁠shares driven by ⁠Big Tech's ballooning spending, set to cross more than $740 billion for this year. Here are some details: US MarketsPowered By As on 13 Aug 2026, 07:16 PM IST S&P 500 Top Gainers Super Micro Computer39.64(5.40%) Robinhood Markets98.75(4.04%) Hewlett Packard61.07(3.88%) Western Digital470.21(3.55%) Gainers" S&P 500 Top Losers Tapestry130.35(-15.21%) Coterra Energy32.56(-8.62%) Cisco Systems115.11(-7.08%) Newmont114.30(-3.01%) Losers" * 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. * The AI chips business had helped position Cerebras as a challenger ⁠to Nvidia and fueled a 41% rise in shares from the IPO price of $185. * The Sunnyvale, California-based company's cloud business roughly quadrupled ⁠to $126 million, versus the year-ago quarter. * But its hardware sales, including AI chips, declined to $54.1 million from $70.3 million a year ago. * Second-quarter adjusted gross margin fell to 40.6% from 46.5% in the prior quarter, while revenue missed analysts' estimates despite a higher annual outlook. * "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. * 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.

Cerebras Systems Stock Surges Monday: What's Driving the Move? - Cerebras Systems (NASDAQ:CBRS)

Cerebras Systems Inc (NASDAQ:CBRS) shares are trading higher Monday morning as investors continue to react to management's upbeat 2027 demand commentary and a raised fiscal 2026 outlook. as well as a wave of major institutional position disclosures filed after Friday's market close. * Cerebras Systems stock is charging ahead with explosive momentum. Why is CBRS stock surging? Hedge Fund 13F Filings Reveal Institutional Accumulation Monday's surge is being partly fueled by a flurry of 13F and Schedule 13G disclosures showing prominent hedge funds building sizable stakes in CBRS during the second quarter. Chase Coleman's Tiger Global Management disclosed a massive new position of nearly 3.0 million shares valued at $663 million, marking one of the firm's largest new tech bets. Ken Griffin's Citadel Advisors revealed a 1.25 million-share stake accompanied by extensive call option holdings, while Altimeter Capital and Atreides Management reported significant equity positions. Cathie Wood's ARK Invest's daily trade disclosures also show the firm bought 106,941 shares (valued at roughly $28 million) across its ARKK and ARKW ETFs on August 13, stepping in to buy the post-earnings selloff directly. OpenAI Partnership and Ultrafast API Deployment Drive Analyst Bull Case Further boosting sentiment, analyst commentary highlighted Cerebras powering "Ultrafast," a new API service tier for OpenAI's GPT-5.6 Sol model. The specialized hardware processing tier runs at up to 750 output tokens per second, delivering speeds up to 14 times faster than standard processing. Latest Private Market Opportunities Join 400,000+ Investors In a note to clients late last week, Wedbush analyst Matt Bryson framed the launch as key progression in the company's relationship with OpenAI. Bryson noted that OpenAI remains committed to taking 750MW of Cerebras capacity by 2028, with contract options allowing OpenAI to extend or contract additional capacity through 2030. Wedbush maintained an Outperform rating on CBRS and raised its price target from $280 to $290. Neo-Clouds Diversify Beyond Nvidia, Driving Upbeat 2027 Demand Commentary The rally serves as a reset after the stock fell last week despite posting record core revenue of $209.9 million, up 103% year-over-year, and reporting $25.4 billion in remaining performance obligations. The prior pressure reflected a quarter where top-line revenue of $180.11 million missed the $194.2 million Street estimate by 7.26%, briefly sending shares down 17.4% to $216 in early trading. Management framed the recent setup as a temporary sentiment swing rather than a structural bottleneck in AI demand. On the earnings call, CEO Andrew Feldman explained that emerging neo-cloud providers are actively diversifying away from single-vendor GPU dependence on Nvidia Corp, creating what he called a "large" 2027 opening for Cerebras as buyers adopt multi-vendor stacks or build around Advanced Micro Devices. Additionally, management raised its fiscal 2026 outlook for revenue between $880 million and $890 million, signaling a sharp re-acceleration in multi-vendor AI deployment demand. Gross margin for fiscal 2026 was also guided to a strong range of 41% to 43%, reflecting favorable mix shifts toward high-margin wafer-scale AI architecture and cloud services. Management noted that breaking away from single-vendor GPU reliance positions Cerebras as a premier choice for hyperscalers and neo-clouds seeking alternative compute infrastructure. Executive commentary also emphasized that the $25.4 billion in remaining performance obligations provides substantial revenue visibility as capacity expands to satisfy customer demand. Feldman added that shifting market dynamics allow sub-assemblies and multi-vendor AI stacks to capture market share, establishing a strong operational foundation as Cerebras scales into 2027. CBRS Shares Jump Monday Morning CBRS Price Action: Cerebras Systems shares were up 15.88% at $253.76 at the time of publication on Monday, according to Benzinga Pro data. Shares have gained nearly 50% over the trailing month. Even with Monday's bounce, CBRS is navigating key technical levels following its post-earnings swing: the stock is trading above its 20-day moving average ($224.50) while attempting to reclaim previous trading ranges. ETFs The Top 5% of Americans Are Outspending Their Own Paychecks. That's the Risk to Watch. America's top 5% are still spending strongly as rising stock prices boost wealth, while consumer spending growth converges across income groups. 4 min read Read this article Image: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Cerebras AI growth story faces investor reality check - Cerebras Stock Tanks 16% After Revenue Miss

Cerebras AI growth story faces investor reality check 1/10 Cerebras Stock Tanks 16% After Revenue Miss Cerebras Systems shares plunged about 16% in after-hours trading after the AI chipmaker's second-quarter revenue came in below Wall Street expectations, overshadowing stronger adjusted earnings and an upgraded full-year outlook. (Sources: Reuters, SiliconANGLE, Cerebras investor relations) 2/10 Revenue Miss Jolts AI Investors Cerebras reported $180 million in quarterly revenue, below the Street's estimate of about $194 million. The headline miss triggered concerns among investors about the company's ability to convert surging AI demand into sustainable, profitable growth. 3/10 Core Revenue Tells a Different Story The company's core revenue reached about $210 million, up roughly 50% year-on-year and ahead of Wall Street's $201 million expectation. Cerebras adjusts its core metric for pass-through revenue and the accounting impact of customer warrants, making the headline and core figures look notably different. 4/10 Loss Swells, But Stock Compensation Is Key Cerebras posted a net loss of $450.5 million, compared with a profit of $309.5 million a year earlier. However, about $386.6 million of the loss was tied to stock-based compensation, highlighting why investors are focusing more closely on the company's underlying operating performance. 5/10 Full-Year Revenue Outlook Raised Despite the revenue miss, Cerebras raised its 2026 core revenue forecast to $880 million-$890 million, from its previous estimate of $855 million-$865 million. It also expects third-quarter core revenue of $214 million-$216 million, suggesting management remains confident about demand. 6/10 Nvidia Rival Faces a Tough Test Cerebras is positioning its wafer-scale chips as an alternative to Nvidia's GPUs, particularly for low-latency AI inference. Its technology puts computing cores and memory on a single large silicon wafer, allowing certain AI workloads to run at high speed. 7/10 Cloud Business Emerges as Growth Engine Cerebras' cloud and services business has expanded rapidly, with cloud revenue reaching about $126 million and growing several-fold from a year earlier. The shift toward recurring AI infrastructure and inference services could become increasingly important as hardware sales fluctuate. 8/10 $25 Billion Backlog Under the Spotlight Despite the strong AI demand narrative, Cerebras' order backlog remained around $25 billion during the quarter rather than increasing. Investors are therefore watching how quickly the company can translate that backlog into revenue and margins. 9/10 OpenAI Deal Adds Long-Term Visibility OpenAI is among Cerebras' biggest customers, with a major multi-year agreement supporting AI inference capacity. The company has also partnered with AMD, combining Cerebras chips with AMD's rack-scale architecture for faster inference workloads. 10/10 The Big Question: Can Cerebras Scale Profitably? The latest sell-off shows investors are demanding more than rapid AI revenue growth. Cerebras now needs to demonstrate that it can scale production, expand margins and convert its massive backlog into profitable revenue while competing in a market dominated by Nvidia.

AI Demand Is Booming. So Why Are CBRS and CSCO Sinking? Cerebras, Cisco Stocks Sink Despite Booming AI De

The problem may not be demand. It's what investors now expect companies to do with it. Cerebras was down 13% and Cisco about 8% at the time of writing. AI Demand Isn't The Problem Cerebras posted record core revenue of $209.9 million, up 103% year over year, with core cloud and services revenue surging 287%. Remaining performance obligations reached $25.4 billion, and the company raised its full-year guidance. Cisco also reported strong AI demand. It booked $4 billion of hyperscaler AI infrastructure orders in the fourth quarter, taking fiscal 2026 orders to $9.3 billion, and expects $7.5 billion of hyperscaler AI revenue in fiscal 2027. Revenue rose 18% to $17.25 billion, beating estimates. Yet Wall Street sold both. So what was missing? Wall Street Wants Acceleration, Not Just Growth Cerebras guided third-quarter core revenue to $214 million to $216 million, implying just 2.4% sequential growth at the midpoint, despite revenue more than doubling from a year earlier. Core gross margin is also expected to fall to 38% to 40% before recovering in the fourth quarter. For investors, triple-digit annual growth may not be enough when sequential growth is slowing. The AI Trade's New Test Prediction-market traders remain skeptical that the broader AI boom is about to break down. Polymarket puts the odds of a severe AI-industry downturn by year-end at 14%, down from 27% in late July, on roughly $2.9 million in trading volume. Morgan Stanley analysts said "execution remains the key debate" for Cerebras given the scale and speed of the capacity build needed to support its growth. Before the reports, investor Dan Ives called Cisco and CoreWeave "pieces of the puzzle" for the AI trade, arguing the story is shifting beyond capex toward monetization. The reactions to Cisco and Cerebras show investors are looking for more than evidence of strong AI demand. They also want to see that demand translate into faster revenue growth and higher margins. Image: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Cerebras Systems Poised to See More Upside From Capacity, AI Demand, Morgan Stanley Says

Cerebras Systems Inc. is an artificial intelligence (AI) infrastructure company that designs and manufactures an AI compute platform comprised of proprietary systems and software. The Company's products include inference Cloud, Training Cloud, CS-3 system, AI supercomputer, Wafer Scale Engine and model development. The Company's pioneering Wafer-Scale Engine (WSE), a chip encompassing an entire silicon wafer, was specifically designed to enable higher performance and speeds than GPUs for the computational demands of inference, Generative AI (GenAI), and other AI applications. It offers deployment services to assist customers with data preparation, model architecture design, training management, inference optimization, and, in select cases, ongoing system operations and management. It also offers a subscription service providing access to an ongoing stream of software updates and upgrades for purchasers of its hardware.

Cerebras raises its outlook on AI demand, but shares slump

For 2026, Cerebras now targets adjusted revenue of between $880m and $890m, up from $855m to $865m previously. Its adjusted gross margin is expected between 41% and 43%, versus a prior range of 38% to 41%, while analysts forecast 35.89% according to LSEG. In the second quarter, sales climbed 74.3% to $180.11m, while the adjusted loss narrowed to $6.91m, from $40.5m a year earlier. Cerebras also expects to more than triple its revenue in 2027 and reported $25.4bn in remaining performance obligations. The group is ramping up production to fulfill its multiyear $20bn deal with OpenAI, aimed at providing compute capacity for AI. Its core cloud and services business, helped in particular by the ramp-up of that contract, nearly quadrupled in Q2 to $127.73m. Delivering on that contract is crucial for Cerebras, as it largely underpins its current valuation, now more than 18 times its 2027 revenue, a lofty figure. That valuation, and the risks tied to any delay on the OpenAI contract, could also help explain the nearly 14% drop in the stock in after-hours trading.

UBS Adjusts Cerebras Systems Price Target to $330 From $320, Maintains Buy Rating

Cerebras Systems Inc. is an artificial intelligence (AI) infrastructure company that designs and manufactures an AI compute platform comprised of proprietary systems and software. The Company's products include inference Cloud, Training Cloud, CS-3 system, AI supercomputer, Wafer Scale Engine and model development. The Company's pioneering Wafer-Scale Engine (WSE), a chip encompassing an entire silicon wafer, was specifically designed to enable higher performance and speeds than GPUs for the computational demands of inference, Generative AI (GenAI), and other AI applications. It offers deployment services to assist customers with data preparation, model architecture design, training management, inference optimization, and, in select cases, ongoing system operations and management. It also offers a subscription service providing access to an ongoing stream of software updates and upgrades for purchasers of its hardware.

Wedbush Adjusts PT on Cerebras Systems to $290 From $280, Maintains Outperform Rating

Cerebras Systems Inc. is an artificial intelligence (AI) infrastructure company that designs and manufactures an AI compute platform comprised of proprietary systems and software. The Company's products include inference Cloud, Training Cloud, CS-3 system, AI supercomputer, Wafer Scale Engine and model development. The Company's pioneering Wafer-Scale Engine (WSE), a chip encompassing an entire silicon wafer, was specifically designed to enable higher performance and speeds than GPUs for the computational demands of inference, Generative AI (GenAI), and other AI applications. It offers deployment services to assist customers with data preparation, model architecture design, training management, inference optimization, and, in select cases, ongoing system operations and management. It also offers a subscription service providing access to an ongoing stream of software updates and upgrades for purchasers of its hardware.

Cerebras Raises Forecasts on AI Demand, but Shares Sink Nearly 14%

For 2026, Cerebras now targets adjusted revenue of $880m to $890m, up from $855m to $865m previously. Its adjusted gross margin is expected to come in between 41% and 43%, versus a prior range of 38% to 41%, while analysts see 35.89%, according to LSEG. Q2 sales rose 74.3% to $180.11m, while its adjusted loss narrowed to $6.91m from $40.5m a year ago. Cerebras also expects to more than triple revenue in 2027 and reported $25.4bn in remaining performance obligations. The company is ramping up production to meet its multi-year $20bn agreement with OpenAI, aimed at providing AI compute capacity. Its core cloud and services business, which is benefiting in particular from the ramp-up of that contract, nearly quadrupled in Q2 to $127.73m. Meeting that contract is critical for Cerebras because it largely underpins its current valuation, which stands at more than 18 times its 2027 revenue, a hefty figure. That valuation, and the risks tied to a delay in the OpenAI contract, could also help explain the stock's nearly 14% drop in after-hours trading.

Earnings Flash (CBRS) Cerebras Systems Posts Q2 Loss $2.98 per Share, vs. FactSet Est of $1.62 Loss

Cerebras Systems Inc. is an artificial intelligence (AI) infrastructure company that designs and manufactures an AI compute platform comprised of proprietary systems and software. The Company's products include inference Cloud, Training Cloud, CS-3 system, AI supercomputer, Wafer Scale Engine and model development. The Company's pioneering Wafer-Scale Engine (WSE), a chip encompassing an entire silicon wafer, was specifically designed to enable higher performance and speeds than GPUs for the computational demands of inference, Generative AI (GenAI), and other AI applications. It offers deployment services to assist customers with data preparation, model architecture design, training management, inference optimization, and, in select cases, ongoing system operations and management. It also offers a subscription service providing access to an ongoing stream of software updates and upgrades for purchasers of its hardware.

Cerebras raises annual targets on strong AI chip demand

Cerebras Systems Inc. is an artificial intelligence (AI) infrastructure company that designs and manufactures an AI compute platform comprised of proprietary systems and software. The Company's products include inference Cloud, Training Cloud, CS-3 system, AI supercomputer, Wafer Scale Engine and model development. The Company's pioneering Wafer-Scale Engine (WSE), a chip encompassing an entire silicon wafer, was specifically designed to enable higher performance and speeds than GPUs for the computational demands of inference, Generative AI (GenAI), and other AI applications. It offers deployment services to assist customers with data preparation, model architecture design, training management, inference optimization, and, in select cases, ongoing system operations and management. It also offers a subscription service providing access to an ongoing stream of software updates and upgrades for purchasers of its hardware.