Cerebras Shares Rise 17% After Hours on Revenue Beat and New Microsoft Deal

Core revenue, the company's adjusted measure, grew 70% from a year earlier and beat the $214.7 million analysts polled by LSEG had expected, according to CNBC. Revenue under standard accounting rules was $210.8 million, up 55%, which fell just short of that estimate. The stock had lost about 47% of its value since the company's Nasdaq debut in May, so the results gave investors their first clear sign that demand for its alternative to Nvidia's graphics processors is accelerating.

The Microsoft deal adds one of the largest cloud providers to a customer list that already includes Amazon and Oracle. Chief executive Andrew Feldman said Microsoft signed the agreement in October. "We believe revenue begins to show up in Q1 '27," he said, according to CNBC. The company did not disclose the size or terms. Its results statement separately referred to a cloud deal with a "top-three hyperscaler" whose details would come next year, and to commercial wins with two new hyperscalers.

The shift in Cerebras's business is toward selling access to its chips as a service. Cloud and other services revenue rose 265% to $141.9 million on a GAAP basis, while hardware sales fell to $68.9 million from $96.8 million a year earlier. Feldman told analysts that long lead times and higher costs for GPUs create "opportunity for us," according to CNBC.

The growth came at a cost. Cerebras reported a GAAP net loss of $161.2 million, against $22.2 million a year earlier, and a loss of 67 cents a share, wider than the 14-cent loss analysts expected. GAAP gross margin was 20.0%, and core gross margin was 41.0%.

The outlook drove the share move. Cerebras forecast fourth-quarter core revenue of $310 million to $330 million, well above the $271 million LSEG consensus, with core gross margin of 47% to 49% against analysts' 42.1% estimate. It expects core operating margin of minus 1% to plus 1% in the quarter, which would put it at roughly break-even on that measure. For the full year it now expects core revenue of $940 million to $960 million.

The company said it expects to triple revenue in 2027. CNBC calculated that this implies about $2.85 billion, slightly below the $2.92 billion analysts had pencilled in.

"Cerebras' technology remains the undisputed champion of speed," Feldman said in the results statement.

To serve that demand, Cerebras said it has 700 gross megawatts of data centre capacity under contract for delivery by the end of 2027. It also said its systems will be integrated into Oracle Cloud Infrastructure, available in 2027, and that it has widened access through several neocloud providers. The company said it is evaluating financing options to meet the growth in demand, and further detail on the Microsoft agreement is expected next year.