Cerebras Systems reported better-than-expected quarterly revenue on Thursday and touted a new deal with Microsoft. Its stock soared 17% in extended trading. The AI chipmaker, which is trying to challenge Nvidia in the AI chip market, posted core revenue of $230.9 million against analyst estimates of $214.7 million.
Cerebras recorded a loss per share of 67 cents; it was not immediately clear how that compared with the loss of 14 cents expected by analysts surveyed by LSEG. Core revenue grew 70% from $135.7 million, down from 103% growth in the second quarter, according to a company statement.
Chief Executive Andrew Feldman said executives would announce the new relationship with Microsoft, one of the world's top cloud providers, on a conference call with analysts. “We believe revenue begins to show up in Q1 '27,” Feldman told CNBC in an interview, adding that Microsoft signed the deal in October. Cerebras has also landed deals with major cloud providers Amazon and Oracle.
“I think there is opportunity created by, particularly on the hardware side, the sale of hardware, where long lead times in GPUs and more expense creates opportunity for us,” Feldman said, referring to graphics processing units.
For the fourth quarter, Cerebras expects core gross margin of 47% to 49% and revenue between $310 million and $330 million, above analyst estimates of 42.1% margin and $271 million in revenue. The company said it expects revenue to triple in 2027, implying about $2.85 billion, slightly below the $2.92 billion analysts surveyed by LSEG were looking for.
Cerebras shares have slumped about 47% since its Nasdaq debut in May. Feldman said the company is evaluating its financing options to meet ramping demand.
The earnings report came on the same day that Nvidia CEO Jensen Huang resigned from the company he co-founded after multiple scandals involving extramarital affairs.
Analysis
Why This Matters
- Cerebras is positioning itself as a viable alternative to Nvidia in the AI chip market, which could increase competition and potentially lower costs for AI hardware.
- The Microsoft deal gives Cerebras access to one of the largest cloud platforms, validating its technology and opening a major revenue stream.
- The company's revenue tripling forecast for 2027 signals strong demand for non-GPU AI chips, which may reshape how data centers and AI companies source hardware.
Background
Cerebras Systems, founded in 2015, makes large-scale AI chips known as wafer-scale processors, designed to accelerate training and inference for large language models and other AI workloads. The company went public on Nasdaq in May 2026. It has been competing with Nvidia, which dominates the market for AI training chips, by focusing on hardware alternatives to graphics processing units.
Key Perspectives
Cerebras CEO Andrew Feldman: said the company sees opportunity from long lead times and high costs for GPUs, and that Microsoft signed a deal in October with revenue expected from Q1 2027.
Analysts surveyed by LSEG: had expected Q4 revenue of $271 million; Cerebras guided higher to $310-$330 million.
What to Watch
- When Cerebras reports first Microsoft-related revenue in Q1 2027 and how significant that deal is relative to its Amazon and Oracle partnerships.
- How the company's financing efforts to meet demand evolve, including potential debt or equity offerings.
- Whether Nvidia's leadership shake-up creates an opening for Cerebras to capture market share in the AI chip space.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedCerebras beat revenue estimates and announced a deal with Microsoft.US Top News and Analysis: “Cerebras surges 17% after beating on quarterly revenue and announcing Microsoft deal.”
- SupportedCerebras’ stock surged 17% in extended trading after its better-than-expected revenue and guidance and the Microsoft deal.US Top News and Analysis: “Cerebras Systems reported better-than-expected revenue and quarterly guidance in its earnings report on Thursday, and touted a new deal with Microsoft. The stock soared 17% in extended trading.”
- SupportedFeldman said, “We believe revenue begins to show up in Q1 '27,” in a CNBC interview.US Top News and Analysis: “"We believe revenue begins to show up in Q1 '27," Feldman said in the interview”
- SupportedFeldman said, “I think there is opportunity created by, particularly on the hardware side, the sale of hardware, where long lead times in GPUs and more expense creates opportunity for us.”US Top News and Analysis: “"I think there is opportunity created by, particularly on the hardware side, the sale of hardware, where long lead times in GPUs and more expense creates opportunity for us," Cerebras CEO Andrew Feldman told CNBC in an interview, referring to graphics processing units.”
- SupportedNvidia CEO Jensen Huang resigned from the company he co-founded after multiple scandals involving extramarital affairs.US Top News and Analysis: “Its earnings land on the same day that Nvidia CEO Jensen Huang resigned from the company he co-founded after multiple scandals involving extramarital affairs.”
- SupportedCerebras reported core revenue of $230.9 million, compared with analyst estimates of $214.7 million.US Top News and Analysis: “Core revenue: $230.9 million vs. $214.7 million expected”
- SupportedCerebras recorded a loss per share of 67 cents, and it was not immediately clear how that compared with the 14-cent loss analysts expected.US Top News and Analysis: “Loss per share: 67 cents. It's not immediately clear how the number compares with the loss of 14 cents expected”
- SupportedCore revenue grew 70% from $135.7 million, compared with 103% growth in the second quarter.US Top News and Analysis: “Cerebras' core revenue grew 70% from $135.7 million, compared with 103% growth in the second quarter, according to a statement .”
- SupportedFor the fourth quarter, Cerebras expects revenue of $310 million to $330 million, above the $271 million analysts expected.US Top News and Analysis: “For the fourth quarter, Cerebras expects a core gross margin of 47% to 49%, with $310 million to $330 million in revenue. Analysts polled by LSEG were looking for a 42.1% margin and $271 million in revenue.”
- SupportedFor the fourth quarter, Cerebras expects core gross margin of 47% to 49%, above analysts’ 42.1% estimate.US Top News and Analysis: “For the fourth quarter, Cerebras expects a core gross margin of 47% to 49%, with $310 million to $330 million in revenue. Analysts polled by LSEG were looking for a 42.1% margin and $271 million in revenue.”
- SupportedCerebras said it expects revenue to triple in 2027, implying about $2.85 billion, slightly below analysts’ $2.92 billion estimate.US Top News and Analysis: “Cerebras said it expects revenue to triple in 2027. That implies about $2.85 billion in revenue. Analysts surveyed by LSEG were looking for $2.92 billion.”
- SupportedCerebras shares have fallen about 47% since its Nasdaq debut in May.US Top News and Analysis: “Cerebras shares have slumped by about 47% since the company debuted on Nasdaq in May.”
