Cerebras Beats Estimates, Flags Microsoft Deal and Big 2027 Target

The headline numbers

Cerebras reported core revenue of $230.9 million, topping the $214.7 million LSEG consensus, and said core revenue rose 70% from $135.7 million, after growing 103% in the second quarter. The company recorded a 67 cent loss per share, and it was not immediately clear how that compares with an expected 14 cent loss.

Shares jumped 17% in extended trading after the release.

Guidance, partnerships, and strategy

For the fourth quarter, management projected core gross margin in a 47% to 49% range and revenue of $310 million to $330 million, while LSEG had penciled in 42.1% for margin and revenue of $271 million.

CEO Andrew Feldman told CNBC, "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." He said executives will unveil a new relationship with Microsoft on the 5 p.m. ET analyst call, adding the deal was signed in October and "We believe revenue begins to show up in Q1 '27." Cerebras has also struck agreements with Amazon and Oracle and is evaluating financing options to support rising demand.

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Risks, competition, and what it means for your portfolio

Cerebras is positioning itself as a rival to Nvidia in the AI chip market. Since its May Nasdaq debut, Cerebras shares have fallen about 47%, underscoring the volatility around this story even with tonight's beat.

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