Cerebras stock jumps 17% as AI chip challenger posts first profitable quarter and lands Microsoft

Cerebras Systems, the Sunnyvale, California, chipmaker that has positioned itself as a challenger to Nvidia in artificial-intelligence hardware, reported its first profitable quarter on a core basis since going public, sending its shares sharply higher in after-hours trading Thursday after a year in which the stock had fallen by more than half from its debut highs.

The company said in results filed with the Securities and Exchange Commission that revenue under generally accepted accounting principles reached $210.8 million for the quarter ended September 30, up 55% from a year earlier, while the core revenue figure the company uses for guidance came in at $230.9 million, up 70% and well above the $214 million to $216 million range it had forecast in August. Core net income was $29.8 million, Cerebras' first positive quarter on that measure since its May initial public offering, even as the company posted a GAAP net loss of $161.2 million, or 67 cents a share, driven largely by non-cash stock-based compensation tied to the IPO.

Shares closed the regular session Thursday at $97.75, down 3.3%, then rose about 17.8% in extended trading to roughly $115, according to a transcript and market summary published by Investing.com. It was a reversal from the two previous quarters, when Cerebras beat Wall Street's revenue estimates but saw its stock fall anyway on concerns about thin margins and reliance on a single large customer.

A business built on one giant contract, until now

Cerebras makes dinner-plate-sized "wafer-scale" processors it markets as faster than Nvidia's graphics chips for running already-trained AI models, a process known as inference. Since its IPO priced at $185 a share, the company's fortunes have been tied closely to a multiyear agreement, worth more than $20 billion, to supply computing capacity to OpenAI. Investors have repeatedly pressed the company on how quickly it can diversify beyond that relationship, and the stock had tumbled more than 50% from its first-day trading highs by early November amid broader doubts about AI infrastructure spending and the scheduled expiration of a lockup on insider share sales on November 10. Shares touched a 52-week low of $77.84 on November 5.

Thursday's release gave investors the diversification they had been waiting for. Chief Executive Andrew Feldman said the company signed a cloud deal with Microsoft, its first large hyperscaler win outside of Amazon Web Services, which is expected to start contributing revenue in the first half of 2027. The company separately counted Oracle as a new hyperscaler customer; Cerebras and Oracle had announced plans in late October at Oracle's AI World conference to bring Cerebras inference to Oracle Cloud Infrastructure, with availability targeted for 2027. Because the Oracle agreement was finalized after the September 30 quarter close, it is not yet reflected in Cerebras' remaining performance obligations, which stood at $26.1 billion.

• Core gross margin: 41.0%, above the 38%–40% range guided in August
• Cloud and other services revenue: $141.9 million, up 265% from a year earlier
• Cash and investments on hand: $7.8 billion
• Fourth-quarter core revenue guidance: $310 million to $330 million

Cerebras also raised its full-year 2026 core revenue forecast to a range of $940 million to $960 million, up from the $880 million to $890 million it had projected after the second quarter, and told analysts it expects revenue to roughly triple again in 2027. The filing's cover page, dated November 12, lists the results under Item 2.02 of Form 8-K, the SEC's standard disclosure item for announcing quarterly financial results.

Short sellers caught leaning the wrong way

Chief Financial Officer Bob Komin told investors the company had cleared its own targets in every category for a third consecutive quarter.

"We exceeded our guidance across the board for the third quarter in a row and delivered sequential improvements on all core financial metrics."

The reaction stood out because nearly one-fifth of Cerebras' available shares had been sold short heading into the report, according to data cited by a market analysis published by FinanceFeeds, a wager that the stock would continue its post-earnings pattern of falling even on strong numbers. Options markets had priced in a swing of roughly 12% to 14% in either direction; the actual after-hours move exceeded that. Several Wall Street banks, including Morgan Stanley, Wedbush and UBS, had cut their price targets on the stock in the weeks before the report amid the broader pullback in AI hardware shares, with Morgan Stanley's target falling to $178 from $279.

The results matter beyond Cerebras itself. The company is one of a small group of firms, along with Advanced Micro Devices and smaller rivals, trying to carve out a share of the AI chip market dominated by Nvidia, and its ability to land hyperscale cloud providers as customers is widely watched as a test of whether alternative chip architectures can win business beyond specialized AI labs. Enterprise customers named in Thursday's release included the design software maker Figma, the fintech company Block and the real-estate technology firm Bilt, which Cerebras said will use its chips to power an AI assistant called Bilt Concierge.

What comes next

Cerebras said capacity constraints tied to data center construction, including delays in securing land, power and building shells for facilities serving the OpenAI contract, had pushed some planned cloud revenue into later quarters, and the company deducted "delay credits" from its backlog as a result. Management told analysts it now has 700 megawatts of data center capacity under contract and is working to expand manufacturing to support more than tenfold growth in output.

The next test for the stock comes quickly: Nvidia is scheduled to report its own quarterly results on November 17, a release likely to reset expectations across the AI hardware sector regardless of how Cerebras performs between now and then. Analysts are also likely to press Cerebras in the coming weeks for firmer detail on pricing and volumes under the Microsoft and Oracle agreements, both of which the company described in broad terms without disclosing contract values.